Simplification of CSRD and CSDDD
Simplification of CSRD and CSDDD
Council adopts mandate for simplification: concrete thresholds and risk-based approach included
On 25 June 2025, the Member States of the Council of the EU adopted the negotiating mandate aimed at further simplifying sustainability reporting and due diligence obligations. The aim of these measures is to reduce the burden on businesses and boost European competitiveness.
Background
The adopted amendments are part of the EU Commission’s “Omnibus I” package, presented in February 2025. The package aims to make existing sustainability legislation more practical and business-friendly.
The new Council mandate is making it clearer how this relief is to be implemented.
This phased implementation gives businesses time to adapt their sourcing strategies, improve traceability systems, and ensure compliance with the new obligations.
Our CSDDD system supports the implementation of a risk-based approach and aligns with the planned EU requirements.
The CSDDD has adopted a clear limitation and risk-based approach.
The Council’s mandate allows for significant changes to be made to the Corporate Sustainability Due Diligence Directive (CSDDD).
New application thresholds:
- ≥ 5,000 employees
- ≥ 1.5 billion euros annual turnover
This means that, in future, due diligence obligations will only apply to the largest companies. This is intended to concentrate resources on the market players with the greatest influence on global supply chains.
Risk-based instead of company-based approach:
Rather than mapping all business partners comprehensively, companies will only be required to take action where there is a high probability of negative impacts on human rights or the environment, either actual or potential. Obligations to monitor the supply chain will also be limited to ‘level 1’ (direct business partners).
Companies will only be obliged to carry out further checks if there are objective and verifiable indications of risks beyond this level.
Climate strategies: Postponement and clarification
In principle, the obligation to draw up transitional plans for climate change mitigation remains, but companies will only have to state which measures are planned or have already been taken in future. For the time being, mandatory implementation will no longer apply. Additionally, the deadline for adopting such plans has been extended by two years. National supervisory authorities will be permitted to provide companies with advisory support during the preparation process.
Clarity on liability and deadlines for companies
The Council has confirmed the deletion of the harmonised EU liability regime proposed by the Commission. Going forward, Member States will no longer be required to ensure that their liability rules take precedence in cross-border cases where foreign law applies.
The deadline for implementing the CSDDD has been postponed to 26 July 2028.
Outlook: The next step at the European Parliament
The new mandate paves the way for negotiations between the Council and the European Parliament. Once the Parliament has finalised its stance, the trilogue negotiations can commence, with the objective of finalising the reforms by 2025.
Many parties are closely monitoring whether the planned simplifications will deliver on their promises in terms of implementation. While business associations welcome the clearer boundaries, NGOs and human rights organisations warn of dilution effects. Therefore, striking the right balance between relief and ambition remains one of the central challenges of EU sustainability policy.