Posted on June, 12 2025

The draft report proposes changes to major regulations on corporate sustainability. Notably, it suggests raising the Corporate Sustainability Reporting Directive (CSRD) thresholds to 3,000 employees and €450 million in turnover, effectively dismantling the reporting ecosystem that banks, insurers, and investors rely on, and resulting in less clarity and higher risks.

“It seems like the ultimate goal is to render Europe’s flagship environmental laws irrelevant, taking the EU decades backwards. This proposal would undo legal frameworks designed to serve nature and people, offer a level playing field for corporations, and enable a resilient future for all. If the EU really wants to support businesses and act in the best interests of people and nature, it must stand by the carefully crafted laws on corporate sustainability”, said Thibault Girardot, Sustainable Finance Policy Officer at WWF EU.

Ignoring evidence-based information, the report proposes blocking companies from requesting crucial sustainability data from business partners with fewer than 3,000 employees. Instead, it restricts them to using a voluntary, entry-level questionnaire that was never intended for robust sustainability reporting. This would severely sabotage access to information that investors, business partners, and regulators rely on. For that reason, proposing to scrap Article 22 on corporate transition plans from the Corporate Sustainability Due Diligence Directive (CSDDD) exposes companies to significant risks of fragmented litigation across different Member States. It also punishes businesses that have already dedicated time and resources to creating credible transition plans, effectively distorting the competition, and setting the playing field off-balance.

The proposal also threatens to render the EU Taxonomy ineffective and weak by drastically limiting the number of companies required to report against it. This effectively takes away from its original aim of guiding capital with a single, science-based reference and serving as a building block for the EU sustainable finance framework. At a time when more jurisdictions are gradually investing time and resources to build robust taxonomies, this puts the EU at odds with global progress¹.

It is imperative that the EU acts swiftly to prevent the damage that such changes would inevitably cause to Europe’s corporate sustainability framework, and once again prioritise the prosperity and resilience of its nature, its people, and its economy.

¹  In addition to the EU, China, South Korea, Malaysia, Bangladesh, the Dominican Republic, Georgia, and Brazil, as of January 2026, have a mandatory taxonomy framework, according to the Green Finance Institute.