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European lawmakers voted to water down green reporting rules and exempt more companies from the requirements after centre-right and far-right groups allied to pass the EU sustainability omnibus package.
At a time when climate change is increasing the frequency and severity of extreme weather events, the changes have reduced the effectiveness of the EU’s green reporting rule to little more than “performative exercises”, said Mariana Ferreira, sustainable finance policy officer at WWF.
“This is not a time to slow down on our path to a more sustainable economy, but the EU is moving in reverse”.
With 382 in favour, 249 against and 13 abstentions, only companies with over 1,750 employees and a net annual turnover of €450mn would be required to report under the corporate sustainability reporting directive (CSRD).
Reporting standards would also be simplified further with fewer details required, while sector-specific reporting would be voluntary. Large companies like banks would not be allowed to request more information than what is set out in the voluntary standards, which investors and regulators have said could lead to financial risk as well as increased costs for companies.
Meanwhile, only large corporations with more than 5,000 employees and a turnover of €1.5bn would be subject to the corporate sustainability due diligence directive (CSDDD). Companies would also no longer be required to have a transition plan showing their business models are compatible with the Paris Agreement and would only face fines for noncompliance at a national, rather than EU, level.
Setback for EU’s green deal
The vote comes as the centre-right European People’s Party (EPP) decided to forgo its alliance with traditional centrist allies for the far-right in order to move ahead with deregulation. This could mark a precedent for future rulesetting, as the EU moves forward with simplifying other laws, warned Andreas Rasche, professor and associate dean at the Copenhagen Business School.
“Let’s be clear: this is no accident. It is the result of deliberate political manoeuvring and a reckless “take-it-or-leave-it” negotiating tactic,” he wrote on LinkedIn.
The alliance with the far-right has driven through an agenda that suppresses previously agreed legislation which was designed to support the transition to a green economy, said Olivier Guérin, an advocacy officer at Reclaim Finance.
“While all the science points to the urgent need to reduce the impacts of climate change, MEPs have instead given multinational corporations carte blanche to continue polluting as usual,” he said. “This raises challenging questions as to how the European Union will deliver on its newly agreed 2040 climate target”.
The changes would also allow oil and fast fashion companies to operate with complete impunity and “is a sign of Europe’s ethical collapse”, said Swann Bommier, advocacy director at French nonprofit Bloom.
“For all human rights and environmental defenders, this vote, in the midst of Cop30, constitutes an absolute moral failure. For multinationals, it guarantees handsome profits. For the European industrial fabric, it heralds unbridled unfair competition and an economic disaster waiting to happen.”
The omnibus text will be negotiated with EU governments starting on 18 November, with the aim of finalising the legislation by the end of the year.
This page was last updated November 13, 2025
Written by
Moriah Costa is the Editor-in-Chief of Green Central Banking and has over a decade of experience writing about banking and finance. She is an award-winning American journalist based in Paris and has written for major international publications, including Reuters, The Guardian, and S&P Global. Having grown up in water-stressed Arizona, she has always had a strong interest in bringing awareness to climate and environmental issues.
