With the trilogue agreement of 9 December 2025, the EU has fundamentally revised key sustainability rules: The reporting and due diligence obligations under the CSRD and CSDDD will in future apply only to very large companies, and the complexity of the requirements has been reduced. Reactions to this decision are divided – between relief and concern.
What Has Been Decided in Concrete Terms
CSRD (Sustainability Reporting):
In future, only companies with more than 1,000 employees and more than EUR 450 million in annual turnover will be subject to reporting obligations. As a result, around 90% of the companies originally envisaged will no longer be covered.
CSDDD (Supply Chain Due Diligence):
The thresholds will rise to more than 5,000 employees and more than EUR 1.5 billion in turnover. This means that in the EU only around 1,300 companies will still be directly affected.
Value Chain Cap:
SMEs are protected – companies subject to the CSRD may not request information from smaller suppliers that goes beyond the voluntary VSME standard.
Political Majorities and Positions
On 13 November 2025, a majority of conservative and right-wing groups (EPP, ECR, PfE) in the European Parliament voted in favour of far-reaching simplifications. The final vote in plenary is scheduled for 16 December 2025 and is considered a mere formality.
Two Perspectives on the Agreement
Supporters see the agreement as an important step towards strengthening European competitiveness. Danish Minister for Business Morten Bødskov spoke of a “great day for Europe’s competitiveness”. The simplifications in particular relieve medium-sized businesses of bureaucratic burdens and create planning security. Rapporteur Jörgen Warborn (EPP) emphasized: “We are simplifying compliance with sustainability regulations, ensuring historic cost reductions for companies and still delivering results for European citizens.”
Critics warn of a dangerous step backwards. WWF Germany criticizes that the laws have been “hollowed out beyond recognition”. The Supply Chain Law Initiative complains that little remains of the core elements of the CSDDD. NGOs and parts of the business community are concerned that Europe will lose its leadership role in global sustainability standards and that investors will be unsettled.
Background to the Development
1. Economic uncertainty in Europe:
Rising energy prices, inflation and global competition have increased the pressure on European companies. Parts of industry have called for a “regulatory moratorium” – the omnibus initiative is the response.
2. International influences:
US corporations such as Exxon have publicly criticized EU sustainability rules. The ESG backlash in the United States, with large asset managers withdrawing from climate initiatives, has also left its mark in Europe. How strong this influence was on the EU decision remains disputed.
3. Complexity debate:
Many companies complained that the original requirements were too complex and hardly feasible in practice. The European Commission acknowledged that a better balance had to be found between simplification and ambition.
What This Means for Your Company
- For companies no longer subject to reporting obligations:
The regulatory burden is reduced. Nevertheless, sustainability issues remain relevant – customers, investors, banks and business partners will continue to expect transparency and require data. We therefore recommend swift implementation of the CSME. - For large companies that remain subject to reporting obligations:
The requirements remain in place but become more practicable. - For SMEs as suppliers:
The Value Chain Cap protects against excessive data requests – a real relief in day-to-day business. - Strategically:
Those who have already invested in ESG structures should not abandon them. Sustainability remains a competitive factor – regardless of regulatory obligations.
Our Conclusion: Pragmatism with a Sense of Proportion
The omnibus agreement is neither the “great success” nor the “total disaster” that it is portrayed as by various sides. It is a compromise that responds to the real challenges faced by European companies – but also entails risks.
Europe must now prove that relief does not mean standstill. The good news: Many companies are not waiting for political guidelines. They continue to invest in circularity, renewable energies, transparency and regenerative business models – because it makes economic sense, not just because it is required.
Sustainability as a strategic advantage does not disappear because thresholds change. Companies that take the lead today will benefit tomorrow – regardless of what Brussels decides.
Deep Dive:
Big 3: CSRD, CSDDD, and EU Taxonomy in transition
Sources:
- Pressemitteilung EU-Parlament, 9.12.2025
- DRSC: Vorläufige Einigung Trilogverhandlungen
- Haufe: Omnibus-Verordnung Nachhaltigkeit (aktualisiert 10.12.2025)
- WWF Deutschland: Pressemitteilung 13.11.2025
- IHK Bodensee-Oberschwaben: Omnibus-Pakete 2025
Author
Evelyn Oberleiter
Co-founder and CEO of Terra Institute. She has been supporting companies in profound transformation processes for 20 years and focuses on organizational development, corporate culture processes and sustainable leadership approaches. Evelyn brings strong process competence and result orientation, extensive analytical and reflection skills, high communication skills and a distinct systems-thinking approach. As a personal coach, she primarily supports people in top management.
Questions? Feel free to get in touch by e-mail (e.oberleiter@terra-institute.eu).
