Simpler sustainability rules for companies

The new rules mean that mandatory non-financial reporting will only apply to large companies - those with more than 1,000 employees and a turnover of more than €450 million. Smaller companies will be excluded from the obligations and will also be protected from large companies passing on their administrative requirements to them.

Parliament has also greatly simplified the reporting itself. Many details will no longer be mandatory and sector specifics will be voluntary. The European Commission is to help companies with a single digital portal with clear instructions and templates.

An even narrower range of companies will be affected by the obligation to check the impact of their business on people and the environment. So-called due diligence will only apply to really big corporations - those with over 5,000 employees and a turnover of over €1.5 billion. They will have to monitor risks in their supply chains, but smaller partners will only be burdened if necessary.

The obligation to create sustainable business transition plans has been dropped from the proposal and the new rules will only apply from 2029. The Parliament says this is a compromise that will preserve the EU's sustainability goals but also make it easier for companies to operate on a day-to-day basis.