The European Union has relaxed a number of rules that required businesses to take environmental risks into account in their supply chains and report on their environmental impact. The relevant changes were finally approved by EU ministers at a meeting in Brussels. Businesses and foreign governments welcome the decision, but environmentalists do not.
This was reported by Reuters.
Response to business pressure
Some industries have systematically criticized the current regulatory restrictions. In their opinion, burdensome bureaucracy and overregulation have limited the competitiveness of European companies in the international market.
At the same time, the provisions of the European directive on corporate sustainability due diligence (CSDDD) have irritated the United States and Qatar. These countries warned that this could disrupt gas supplies to Europe.
At the same time, environmental activists and even some investors are outraged by this decision. They believe that from now on, it will be difficult to identify European companies as truly sustainable.
Limited rules
According to the changes, the European CSDDD directive will now apply only to large companies. This means businesses with more than 5,000 employees and an annual turnover exceeding €1.5 billion.
This refers not only to domestic market players but also to foreign businesses. For international companies importing goods into the EU, penalties are provided. In case of non-compliance, businesses may have to pay up to 3% of their net global turnover.
“We are reducing unnecessary and disproportionate burdens on our businesses through simpler, more targeted, and more proportionate rules,” said Marilena Raouna, Cyprus’s Deputy Minister for European Affairs, who chaired the meeting in Brussels.
Additionally, the European Union postponed the final deadline for CSDDD implementation until mid-2029, whereas the previous deadline had been set for mid-2027. The EU has also cancelled the requirement for companies to adopt climate transition plans.
Companies with turnover up to €450 million will also be exempt from disclosing reports on their actual environmental impact. The EU has made corresponding amendments to the directive on sustainability reporting.
EcoPolitic previously reported that a number of EU countries called for a review of the emissions trading system, as it is detrimental to the sustainability of European businesses.
