In a major move aimed at easing pressure on European businesses, the European Commission has announced plans to streamline key sustainability regulations under the EU Green Deal, pledging to cut red tape and stimulate fresh investment across the bloc.
The initiative, unveiled on Earth Day, proposes significant changes to sustainability reporting rules, raising the threshold for mandatory disclosures under the Corporate Sustainability Reporting Directive (CSRD). Under the new proposal, only firms with over 1,000 employees and annual revenues exceeding €50 million would be required to file detailed environmental reports—a change expected to exempt up to 80% of businesses.
Commissioners argue that the simplification package will reduce administrative burdens by €6.3 billion annually and unlock over €50 billion in economic activity, as businesses channel resources away from compliance and toward innovation, growth, and sustainability action on the ground.
The package also includes scaled-back obligations under the Corporate Sustainability Due Diligence Directive, with a sharper focus on direct suppliers and more practical reporting timeframes. Meanwhile, the EU taxonomy for sustainable investments would become optional for the majority of companies, allowing them to opt in based on market demand.
While environmental groups have expressed concern over potential setbacks, business leaders across Europe have welcomed the move as a long-awaited breath of fresh air.
“This is a much-needed step to make the Green Deal workable for SME’s,” said one industry representative. “It signals that sustainability and competitiveness can go hand in hand.”
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