The proposals are part of the Omnibus I Directive plan to simplify sustainability reporting for businesses within and outside of the EU, which were first outlined in 2023.

Under the new rules, only businesses employing over 1,750 employees, with a net annual turnover of over €450m (£400m), will be required to provide sustainability reporting under the corporate sustainability reporting directive (CSRD).

The original plan envisaged even the smallest SMEs would be caught by the new rules, in a bid to improve transparency, but the burden and costs were viewed as too high.