Europe’s sustainability rules are getting a major haircut! Jörgen Warborn, the European People’s Party (EPP) negotiator for the EU’s Omnibus package, just dropped a draft that slashes the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) way beyond the Commission’s plan. By hiking the company threshold to 3,000 employees and €450 million in revenue, it’d exempt most firms from reporting. Warborn’s also nixing mandatory climate transition plans and easing supply chain checks. Will this free up businesses or gut Europe’s green edge?

What’s the Deal?

The EU’s Omnibus package, launched in February 2025, aimed to lighten the load on companies by tweaking sustainability rules like the CSRD and CSDDD. The Commission proposed raising the CSRD’s scope from 250 to 1,000 employees, cutting 80% of firms from reporting, and set CSDDD at 1,000 employees after a last-minute shift from 500. Warborn’s EPP draft goes harder, limiting both to firms with 3,000+ employees and €450 million revenue—potentially excluding 95% of companies. It scraps mandatory climate transition plans, making them optional, and limits value chain reporting: firms can just explain why data’s missing. Smaller companies (under 3,000 employees) dodge supply chain info requests unless impacts are clear.

Warborn says it’s about “less red tape” for Europe’s €18 trillion economy.

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Who’s Feeling the Impact?

Europe’s 23 million SMEs, especially the 99% with under 250 employees, breathe easier—only 0.1% hit Warborn’s new threshold. Big firms like Siemens, with 300,000+ employees, face less scrutiny, saving €200,000-€600,000 in compliance costs yearly. Investors, managing €10 trillion in ESG funds, fret over losing data—80% of CSRD’s current scope could vanish. Green groups, like ClientEarth’s 362 NGO coalition, slam it as a “competitiveness killer,” fearing weaker human rights and emissions accountability. Germany’s 3.5 million firms, hit by Merz’s CSDDD repeal push, align with EPP’s deregulatory vibe.

Why It’s Awesome?

Warborn’s draft is a lifeline for overworked firms! Compliance costs, hitting 0.009% of revenue for CSDDD, stack up—€4 billion yearly for EU companies. The 3,000-employee threshold and €450 million revenue cap slash this, boosting competitiveness against China’s looser rules. Voluntary SME standards (VSME) protect smaller suppliers from big firms’ data demands, per 70% of surveyed SMEs. Optional transition plans ease pressure—only 30% of firms have them anyway.

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Why It Matters?

The EU’s CSRD and CSDDD set global gold standards, influencing China’s new ISSB-aligned rules and Southeast Asia’s supply chains. Warborn’s cuts could save €2 billion in costs but dim Europe’s green lead—60% of global consumers demand sustainable brands. With 35.6 billion tonnes of CO2 spewed yearly, slashing climate plan mandates and value chain checks might weaken 2050 net-zero goals, per ECB’s €1 trillion risk warning. The EPP’s move, backed by 70% of German firms, signals a rightward shift post-Ursula von der Leyen’s coalition wobble. A divided Parliament—Renew’s Pascal Canfin wants CSRD intact—faces a tough compromise by June 2025.

What’s Next?

Warborn’s draft heads to Parliament’s JURI Committee, with debates raging until a June 27, 2025, amendment deadline. EU Council’s draft, softer on due diligence, hints at a middle ground, but NGOs demand CSRD thresholds stay low. EFRAG’s ESRS simplification, due April 2025, could cut data points by 20%. German Chancellor Merz’s CSDDD scrap push adds pressure—90% of EU firms want predictability, per HEC Paris.

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