CSRD & CSDDD: EU Parliament sets course for simplification

On 13 November 2025, the EU Parliament adopted its position on the amendment to the directive on the simplification of sustainability reporting (CSRD) and due diligence obligations (CSDDD). Together with the Council's position, which was published on 23 June 2025, this represents the second important negotiating position for the so-called substance proposal.

This article classifies the current developments, summarises the key changes and highlights the implications for companies that are already becoming apparent today.

Key points of the Parliament's position on the CSRD & CSDDD

CSRD: New thresholds for reporting requirements

• employ more than 1,750 people and
• have a turnover of more than €450 million.

This would further reduce the number of companies directly affected.

Indirect impact remains: Even if numerous companies are no longer directly subject to reporting requirements in future, large companies will continue to demand ESG information from their supply chain. This means that many SMEs will remain indirectly affected by the CSRD and will have to provide sustainability information.

CSDDD: Reporting requirements for very large companies 

• more than 5,000 employees and
• more than €1.5 billion in turnover

Here, too, the focus is on very large companies, without the associated requirements along the value chains losing any of their significance.

What are the next steps in the EU legislative process?  

Timetable for the trilogue negotiations

The trilogue negotiations between the European Parliament, the Council and the Commission began on 18 November 2025. The aim is to reach an agreement before the end of 2025.

Overview of negotiating positions  

It remains to be seen how the final thresholds will be set.

Was passiert danach?

1. Adoption of the final text and publication in the Official Journal of the EU
2. Implementation into national law
3. Adaptation of relevant regulations (including the German Commercial Code (HGB) and final audit)

For companies, this means that even if the formal scope of application is redefined, internal preparations should not be put on hold. The EU remains clearly focused on sustainability-related transparency and governance.

What does this mean for companies?

1. Companies without direct reporting obligations

• Business partners continue to request sustainability information. 
• Investors, banks and public contractors continue to be guided by ESG indicators.
• Strategically relevant sustainability issues (e.g. climate risks, supply chain requirements) are not losing importance.

Recommendation for you: Continue to report in a structured manner – but with clear prioritisation. Materiality, proportionality and efficiency are becoming more important. 

(Discover here how you can use the materiality analysis as a strategic tool: Materiality assessment as a strong basis for a sustainability strategy)

2. Companies subject to reporting obligations

For these companies, the core requirements remain unchanged.

• Continue projects on data collection and quality
• Clarify and specify internal responsibilities
• Expand digital and automated reporting processes

Even if simplifications are foreseen, the ESRS will remain the basis for reporting.

(Important conclusions from the challenges faced by the first companies reporting under the CSRD can be found here: CSRD – Wave One: Lessons learned, quick fixes and practical tips)

3. SMEs in the supply chain of large companies

The indirect effects remain. ESG information must continue to be provided, often in standardised, comparable formats, such as the VSME standard – a European reporting standard developed specifically for SMEs.

(Click here to learn more: VSME standard: lean solution for your sustainability report)

Conclusion

With the Parliament's position, the legislative process to simplify sustainability reporting is gaining momentum. The proposed higher thresholds provide relief, but do not change the fundamental direction of European sustainability regulation.

For companies, this means fewer obligations – but still clear expectations in terms of transparency, management and reliability. The coming weeks will show the extent to which Parliament and the Council will agree in the trilogue. One thing is already clear today: proactive, pragmatic sustainability management remains a key success factor.

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• Sustainability reporting and due diligence: MEPs back simplification changes | News | European Parliament
• EU Parliament agrees on position on simplifying sustainability reporting | Deutsches Rechnungslegungs Standards Committee