EPP calls for sharp reduction in EU ESG reporting

EPP

The European People’s Party (EPP) has unveiled proposals for even sharper reductions to the European Commission’s Omnibus initiative, which seeks to simplify the EU’s sustainability reporting regulations.

According to ESG Today, Jörgen Warborn, Parliament’s Omnibus rapporteur from the EPP, published draft amendments that could significantly lower the number of companies subject to reporting obligations.

The European Commission initially presented the Omnibus proposal in February, aiming to ease compliance burdens under key regulations such as the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), the Taxonomy Regulation, and the Carbon Border Adjustment Mechanism (CBAM). A central feature of the proposal was raising the CSRD threshold from 250 to 1,000 employees, exempting roughly 80% of companies from mandatory sustainability reporting.

However, the EPP draft goes further, recommending the CSRD and CSDDD apply only to companies with over 3,000 employees and annual revenues exceeding €450m. This move would substantially reduce the scope of firms required to conduct detailed sustainability and due diligence reporting across the EU.

The draft also retains measures aimed at alleviating reporting burdens on smaller companies. It keeps the Voluntary Standards for SMEs (VSME) but raises the small company threshold to 3,000 employees. For value chain disclosures, companies would not be penalised if data cannot be obtained. Instead, firms would be allowed to explain the steps they took to gather information, why it was unavailable, and outline future plans for obtaining it. For supply chain due diligence, smaller companies would only be expected to use information that is “reasonably available”, unless specific adverse impacts are identified.

Another significant revision from the EPP eliminates the mandatory requirement for climate transition plans. Under the new draft, companies would only need to disclose transition plans if they have voluntarily established one. Furthermore, the draft removes provisions that allowed individual member states to introduce stricter national due diligence rules in areas such as emerging risks linked to new products or services.

The proposed amendments are likely to complicate negotiations within Parliament. Initial debates held in March already revealed wide divisions, with some lawmakers advocating for the complete removal of the CSRD and CSDDD, while others oppose any substantial reduction in reporting obligations.

In his statement announcing the release of the draft, Warborn said: “I’m entering this process with a clear ambition: to cut costs for businesses and go further than the Commission on simplification. Less red tape and fewer burdens for businesses. That’s how we strengthen Europe’s economy.”

The EPP’s draft will now shape Parliament’s position ahead of negotiations with the EU Council on the final legislative package.

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