With 17 votes for, 6 against and 2 abstentions, the Legal Affairs Committee approved its position on a series of changes to sustainability reporting and due diligence requirements for companies.

Reduced social and environmental reporting

The Commission originally proposed cutting the number of companies required to carry out social and environmental reporting by 80%, whereas MEPs want to reduce the scope further to cover only those companies with over 1,000 employees on average and a net annual turnover above 450 million euro. This would also apply to sustainability reporting under taxonomy rules (i.e. a classification of sustainable investments).

For firms no longer covered by the rules, reporting would be voluntary, in line with Commission guidelines. To prevent large companies from shifting their reporting duties onto their smaller business partners, these would not be allowed to request information beyond the voluntary standards. Sector-specific reporting would also become…