European Parliament Approves Simplified Sustainability Reporting and Due Diligence Rules – Omnibus I

On 16 December 2025, the European Parliament approved a provisional agreement aimed at simplifying and reducing the scope of sustainability reporting and corporate due diligence requirements. These changes form part of the “Omnibus I” package proposed by the European Commission in February 2025 to ease the administrative burden on companies.
 

Key changes

The most significant amendments include:

• Sustainability reporting will now only apply to EU companies with more than 1,000 employees and a net annual turnover exceeding €450 million.

• Streamlined and clarified requirements for the disclosure of sustainability information.

• A reduced number of companies will be subject to mandatory due diligence processes within their supply chains.

These updates aim to make the regulatory framework more efficient while maintaining focus on companies’ environmental, social and governance (ESG) impacts.
 

BDO Global perspective

BDO Global IFRA has published an in-depth article outlining the approved changes and their potential implications for businesses. The article can be accessed here:
European Parliament approves simplified sustainability reporting and due diligence rules – Omnibus I
 

What does this mean for companies in Latvia?

Although the scope of mandatory reporting is being narrowed, the importance of ESG transparency continues to grow. Companies that fall outside the new thresholds should still:

• ensure transparent and reliable sustainability disclosures,

• meet the expectations of investors and business partners,

• prepare for further regulatory developments in the ESG landscape.

BDO Latvia will continue to monitor the evolving requirements and support companies in adapting to the changes in both sustainability reporting and ESG assurance.