The European Parliament has approved a new set of measures that would make sustainability reporting and due diligence requirements easier for companies across the European Union. The vote passed on Thursday after the European People’s Party worked together with conservative and far right groups to push the package through.
This new law is part of a broader effort in Brussels to simplify how companies report their environmental and social impacts. Supporters say the rules had become too heavy for firms to manage, while critics argue that the changes weaken key accountability tools that were introduced to ensure responsible corporate behavior.
The Parliament’s version of the law will now move to negotiations with member states. Only after those talks can the new rules receive final approval.
The path to Thursday’s vote has been complicated. In October, the Parliament rejected an earlier compromise that had been reached the centrist political groups. That agreement collapsed in the final plenary vote when several lawmakers from the Socialists and Democrats broke away. After that setback, the European People’s Party shifted its approach and decided to work more closely with right leaning groups.
The revised proposal passed with 382 lawmakers in support, 249 opposed and 13 abstaining.
The political groups on the right supported the version prepared Swedish lawmaker Jorgen Warborn from the European People’s Party. His proposal significantly raises the threshold for which companies must follow due diligence rules. Under the new approach, the requirements would apply only to companies that employ more than five thousand people and have an annual turnover above one point five billion euros.
This represents a major shift from the original Corporate Sustainability Due Diligence Directive. That earlier plan applied to companies with more than one thousand employees and a yearly turnover of four hundred and fifty million euros. Critics warn that raising the threshold will leave many firms outside the scope of the rules and weaken protections designed to prevent environmental harm and human rights abuses in supply chains.
Another notable change is the removal of potential financial penalties. The Parliament eliminated the possibility of fines reaching up to five percent of a non compliant company’s global turnover. Instead, the law now simply states that penalties should be set at appropriate levels. According to Warborn, this gives national governments the freedom to decide how strict their enforcement should be.
The debate around the proposal has highlighted the growing divide in Parliament over how to balance economic competitiveness with corporate responsibility. The next stage of negotiations with member states is expected to be intense, as governments will have to decide how far they are willing to go in easing or preserving existing standards.
