Legal Affairs Committee MEPs and the European Council have agreed to reduce sustainability reporting and due diligence requirements for companies, a proposal that forms part of the EU’s Omnibus I package, a major exercise to reduce red tape and the administrative burden for businesses operating in the EU.

The decision to dilute the rules comes after months of debate and disagreement over the way forward on sustainability reporting and due diligence rules.

The new deal means that social and environmental reporting will only be required for EU companies employing on average over 1,000 employees and with a net annual turnover of over €450m (£294m).

The net turnover threshold has also been increased for non-EU companies to €450m generated in the EU for sustainability reporting.