Edging Closer To CSRD Clarity On Scope – Corporate and Company Law
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On 9 December 2025, negotiators from the European Parliament (EP), the Council of the European Union (the Council) and the European Commission reached a provisional political agreement on the final text of their “Omnibus” package amending the Corporate Sustainability Reporting Directive (CSRD).
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Corporate/Commercial Law
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On 9 December 2025, negotiators from the European Parliament
(EP), the Council of the European Union (the Council) and the
European Commission reached a provisional political
agreement on the final text of their “Omnibus”
package amending the Corporate Sustainability Reporting Directive
(CSRD).
Though the final text is not yet published, the
publicly-available press-releases confirm a substantial narrowing
of the CSRD’s scope, representing around five to 10 percent of
the original number of entities that were captured:
- For EU companies: 1,000 employees and
at least €450 million net turnover.
- For non-EU companies: At least €450
million net turnover in the EU. Any minimum net turnover thresholds
for EU branches/subsidiaries were not announced and will need to be
reviewed in the final text.
- Exemptions/Transition: Financial holding
undertakings are exempt; “wave one” companies that
started reporting for FY2024 but fall out of scope will benefit
from a transition exemption for FY2025–2026.
The change reflects a broader recalibration that the EU is
seeking to simplify sustainability reporting obligations and reduce
the compliance burden on companies, particularly for smaller
firms.
What next?
The EP is expected to formally adopt the Directive at its
plenary session on 15-18 December 2025. The Council must also
formally adopt the text before publication in the Official Journal,
after which the new thresholds and related amendments will enter
into force.
What about the standards themselves?
The development on scope comes at the same time as progress on
the content and form of sustainability reporting under the revised
reporting standards.
On 3 December 2025, EFRAG submitted to
the Commission its technical advice on draft simplified European
Sustainability Reporting Standards (ESRS) as part of the Omnibus
initiative.
These draft-simplified ESRS reduce the mandatory data points by
61 percent, streamline the materiality assessment, remove a range
of voluntary disclosures and introduce greater flexibility and
proportionality in reporting, including relaxed requirements for
value-chain data collection and more emphasis on fair presentation
and decision-usefulness of information.
Edging Closer To CSRD Clarity On Scope
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