Read Accountancy Europe's response to Commission's call for evidence on EU taxonomy climate and environmental DA
Reassessing requirements improves policymaking, but early CSRD revisions create uncertainty undermining trust in EU legislation. Read our views
On 8 December, the European Parliament (EP) and the Council stroke a deal on the Omnibus proposal amending sustainability reporting and due diligence rules.
Below we share a summary of key elements in the provisional agreement
Corporate Sustainability Reporting Directive (CSRD):
Corporate Sustainability Due Diligence Directive (CSDDD):
The EP Legal Affairs (JURI) Committee approved the provisional agreement today, 11 December. The EP plenary vote is scheduled on 16 December. The Council must also approve the agreement.
The Draft Amended ESRS:
By the end of December, EFRAG will complete the technical advice with the Basis for Conclusions, Cost Benefit Analysis and the Explanatory Note to the standards.
The EC will now prepare the Delegated Act revising the first set of ESRS based on EFRAG’s technical advice.
The ESRS Knowledge Hub brings together all key ESRS-related materials in one user-friendly environment and:
The ESRS ‘Quick Fix’ Delegated Act (DA) was published in the Official Journal of the EU and entered into force on 13 November.
The DA provides a two-year pause on the reporting of additional phase-in data points for certain CSRD wave-1 undertakings.
The EP’s Economic and Monetary Affairs (ECON) and Environment, Public Health and Food Safety (ENVI) Committees voted against (68 against, 42 in favour and 1 abstention) a motion for a resolution proposing to object the EU Taxonomy Delegated Act (DA) amending the Disclosures, Climate and Environmental DAs. However, a vote on the objection has been scheduled at the plenary session on 17 December.
The motion for a resolution was tabled by the S&D, the Greens/EFA, and the Left MEPs. The DA aims to simplify key aspects of taxonomy reporting, including introducing a materiality threshold of less than 10% for turnover, streamlining disclosure templates, and easing certain “Do No Significant Harm” (DNSH) criteria.
The Council did not object the DA.
The Council and the EP have reached a provisional political agreement on a targeted revision of the EU deforestation-free products regulation (EUDR). The deal aims to simplify implementation and postpone the regulation’s application, giving companies, traders, and authorities more time to prepare.
The revised rules will extend the EUDR’s enforcement to 30 December 2026 for large and medium operators, with micro and small operators receiving an additional six-month extension. Responsibility for submitting due diligence statements will fall on operators placing products on the market, while downstream operators will have reduced obligations. Micro and small primary operators will submit a single simplified declaration for traceability.
The EC is tasked with reviewing the regulation by 30 April 2026, assessing its impact and administrative burden, in particular for micro and small operators.
The EP will vote on the deal during its 15-18 December 2025 plenary session. The text agreed must be endorsed by both the EP and Council and be published in the EU’s Official Journal before the end of 2025 for the changes to enter into force.
The European Ombudswoman found procedural shortcomings in the EC’s urgent preparation of several proposals, notably the Omnibus I on sustainability.
In the preparation of Omnibus I, the EC:
These departures from Better Regulation rules contributed to a finding of maladministration. The Ombudswoman urged clearer justification of urgency and that even accelerated procedures remain transparent, evidence-based, and inclusive.
At the exchange of views with the EP JURI Committee on the 2025 overview report on simplification, implementation, and enforcement, Commissioner Valdis Dombrovskis noted that the EC is preparing its reply; the EC has three months to respond to the Ombudswoman.
The EC has clarified the timing and process of the public consultation for the Corporate Sustainability Due Diligence Directive (CSDDD) guidelines in response to a written question from MEP Catarina Vieira (Verts/ALE).
MEP Vieira raised concerns about when the consultation would be launched, what steps are being taken to ensure small and medium-sized enterprises can participate, and whether the EC is on track to finalise the guidelines within the shortened timeline proposed in the Omnibus legislation.
Commissioner McGrath confirmed that, while stakeholder consultation is legally required under Article 19 of the directive, it has not yet been possible to launch the consultation due to ongoing legislative negotiations on the Omnibus proposal, which may affect the guidelines’ content and timing. Preparatory steps are underway to ensure an efficient consultation once negotiations are concluded.
The EC proposed a set of amendments to the Sustainable Finance Disclosure Regulation (SFDR) to simplify disclosures and improve their usability for retail investors. Among the main changes:
The EC also published a set of FAQs to clarify links with other sustainability legislation:
The EC is set to adopt two DAs on environmental, social and governance (ESG) rating providers in the first quarter of 2026:
The International Platform on Sustainable Finance (IPSF) published two key outputs:
1) the 2025 annual report, highlighting major developments in sustainable finance:
2) a technical note examining how the DNSH principles are defined and applied across jurisdictions, providing:
The IPSF will continue its work in 2026, focusing on transition frameworks, taxonomies, strategic sectors, and comparability.
Leading MEPs attending the Conference of the Parties (COP30) in Brazil regret that only modest results have been achieved on international climate action. The final deal shows a gap between countries’ stated ambitions and the enforceable emissions reductions needed to meet them.
During the discussions, the negotiators:
The EU played a significant role in the discussions and yet faced strong resistance from BRICS and Arab countries. The EU:
The International Auditing and Assurance Standards Board (IAASB) released a set of illustrative practitioners’ assurance reports to support the implementation of ISSA 5000, General Requirements for Sustainability Assurance Engagements. The examples show how the standard can be applied in real-world scenarios. They include:
The guidance helps practitioners address practical and technical issues, promoting consistent and confident application of ISSA 5000.
The Taskforce on Nature-related Financial Disclosures (TNFD) will complete its current technical work by September 2026 and pause any new guidance. This follows the ISSB’s decision to advance its own standard-setting on nature-related risks and opportunities, drawing on the TNFD framework.
The ISSB plans to introduce incremental disclosure requirements not already covered in IFRS S1 and S2, with options including application guidance, amendments, industry guidance, or a new standard. The ISSB is targeting an exposure draft on incremental disclosure requirements in October 2026, in time for the Convention on Biological Diversity COP17.
The Financial Reporting Council (FRC) issued a UK version of the International Standard on Sustainability Assurance 5000, General Requirements for Sustainability Assurance Engagements. The standard provides comprehensive requirements for conducting sustainability assurance engagements, applicable to both limited and reasonable assurance.
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We Mean Business Coalition
Global SME Reporting practices on ESG
Harvard Law School Forum on Corporate Governance
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