The 13/10 the Parliament’s Committee on Legal Affairs (JURI) voted to adopt the EPP Omnibus comprise (17 votes for, 6 against and 2 abstentions), with 4 items being particularly politically sensitive according to Jörgen Warborn (EPP):
🟣 Scope
➡️ CSRD: 1000 employees and net annual turnover above 450 M€ (this would also apply to sustainability reporting under green taxonomy rules)
➡️ CS3D: 5000 employees and net yearly turnover above 1,5 bn€ (incl foreign businesses with a net turnover in the EU above the same threshold)
For firms no longer covered by the rules, reporting would be voluntary, in line with Commission guidelines. Sector-specific reporting would also become voluntary.
The European Central Bank has expressed concerns that the reduction in scope leaves a blind spot regarding the companies’ exposition to climate-related financial risks – but Jörgen explained that he finds that “the balance is now good” and that one-to-one relations between companies and banks can fill this blind spot.
‼️ The financial markets and large companies will set the expectations with regards to reporting and due diligence. Sustainability governance and reporting is the new normal.
🟣 Transition plan (vote 13/12, most narrow majority, will it hold in the plenary vote?)
➡️ No difference made in CSRD
➡️ Transitions plans are still mandatory in CS3D
➡️ But “legally binding implementing actions” would not be required by CS3D (“saying exactly what you actually have to do”)
🟣 Civil liability issue
Businesses should be liable for damages caused by breaches of due diligence obligations under national law, rather than at the EU level.
The maximum fine level for offending companies would remain at 5% of their global turnover, and the Commission and EU member states should provide guidance for national authorities on these penalties.
➡️ Previous criticism was linked to the old CS3D according to Jörgen Warborn
➡️ Now the EU parliament, commission and council are aligned
➡️ This issue is not linked to simplification, but to the need for investments in Europe to create growth according to Jörgen Warborn
🟣 CS3D due diligence
Instead of systematically asking for information required for their due diligence assessments from their business partners, MEPs want CS3D in-scope companies to adopt a risk-based approach (different from the Council’s position, now subject to negotiations), whereby they only ask for the necessary information where there is the plausible prospect of an adverse impact in their business partners’ activities.
Next steps
Should the Parliament approve the committee mandate at the next plenary session (expected next week), MEPs and EU governments should start negotiations on the final text of the legislation on 24 October.
The final trilogy session is planned for Dec. 8, with the objective to give companies predictability for 2026.
You can listen to the press conference here: Press conference by Jörgen WARBORN (EPP, SE), rapporteur on simplified sustainability reporting and due diligence requirements – Multimedia Centre