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Sustainability Reporting – EU Commission Plans to Ease Requirements

March 12, 2025

Contributed by: MTG, Germany

On 26 February 2025, the EU Commission published its proposals for simplifying and easing sustainability reporting requirements. This “Omnibus Initiative” aims to reduce reporting obligations for companies and make them more practical. Below, we have summarised the key proposals for you.

Planned Easing of Sustainability Reporting Requirements

Narrowing the scope of reporting companies: In the future, only large companies with more than 1,000 employees will be required to report, provided they either have an annual turnover of at least €50 million or a balance sheet total of at least €25 million.
Limiting information from the value chain: Companies subject to the Corporate Sustainability Reporting Directive (CSRD) will only be able to request limited information from companies in their value chain with fewer than 1,000 employees.
Reducing data points by revising ESRS standards: A reduction in requirements under the European Sustainability Reporting Standards (ESRS) is intended to simplify reporting.
No sector-specific standards: Contrary to previous plans, no specific standards for individual industries will be introduced.
Postponement of reporting obligation: The initial reporting requirement will be postponed by two years, meaning that it will only become mandatory in 2028 for the 2027 financial year. However, this postponement does not apply to publicly traded companies.

Additional Easing under the Taxonomy Regulation

No reporting obligation for companies with fewer than 1,000 employees and less than €450 million in revenue (on a voluntary basis).
Voluntary reporting for companies exceeding 1,000 employees but generating less than €450 million in revenue.
Mandatory reporting for companies with more than 1,000 employees and more than €450 million in annual revenue.

Sustainability Remains a Key Topic

Despite these proposed easements, companies that have already begun implementing CSRD reporting should be aware that sustainability is not a niche topic and will continue to play a role in other areas, such as lending practices. Furthermore, insights gained through the double materiality analysis can be valuable for shaping long-term business strategies.

What Does This Mean for You?

Please note that these are currently just draft proposals. They should not be considered binding law, as they must first go through the EU legislative process and be published in the Official Journal before being transposed into national law by member states.

MTG Group are closely monitoring these developments. If you have any questions regarding sustainability reporting or need support, contact our experts who are happy to assist you.