European Central Bank (ECB) president Christine Lagarde has urged EU lawmakers not to weaken the Corporate Sustainability Reporting Directive (CSRD) and related regulations as they debate sweeping reforms to European sustainability and due diligence rules.
According to ESG Today, in a letter to the European Parliament, Lagarde warned that reducing sustainability reporting requirements under the European Commission’s Omnibus I package would threaten the ECB’s ability to manage climate-related risks in the financial system.
The proposed reforms seek to ease reporting burdens for companies by dramatically raising thresholds for firms covered under the CSRD. Currently applicable to companies with over 250 employees, the new proposal would limit the scope to companies with more than 1,000 employees, excluding around 80% of firms from reporting obligations. For those remaining, reporting frequency and requirements would also be scaled back.
Further changes under debate include altering the Corporate Sustainability Due Diligence Directive (CSDDD) to mandate human rights and environmental due diligence only for direct business partners and requiring less frequent checks. Some lawmakers, such as Parliament rapporteur Jörgen Warborn, have gone further, proposing thresholds of 3,000 employees and €450m revenue for inclusion under CSRD and CSDDD rules.
Lagarde stressed that the ECB has embedded climate considerations into its monetary policy, from integrating climate risks into collateral frameworks in 2022 to introducing a “climate factor” for Eurosystem collateral from 2026. However, she warned that access to reliable corporate climate data is crucial for these measures to succeed.
Specifically, Lagarde said: “It is therefore important that these amendments strike the right balance between retaining the benefits of sustainability reporting for the European economy and the financial system while also ensuring that the requirements are proportionate.”
She cautioned that curbing data availability would undermine the ECB’s capacity to assess climate risks at a granular level, potentially weakening its climate-related safeguards.
Keep up with all the latest RegTech news here
Copyright © 2025 RegTech Analyst
Copyright © 2018 RegTech Analyst
