Big Companies Now Must Report Their Impact on People, Planet, and Profit
Published December 16, 2025
Goal: Ensure ESG accountability.
The EU Parliament resolution adopts a directive that limits sustainability reporting and due‑diligence rules to only the biggest companies, simplifies audit and digital reporting requirements, sets new penalties, and offers a voluntary path for smaller firms.
EU Parliament resolution – 16 Dec 2025
The European Parliament adopted a resolution that will become a directive to change the rules on corporate sustainability reporting and due‑diligence. The main points are:
| What | Key changes | Numbers / dates |
|---|---|---|
| Who must report | Only the biggest companies need to publish sustainability reports. | Net turnover > €450 million and an average of > 1 000 employees in a year. |
| Scope for listed companies | The same €450 million/1 000‑employee threshold applies to issuers and to groups of issuers. | |
| Digital reporting | Companies must use a single electronic format, but they are not required to mark‑up the data until rules are finalised. | |
| Audit‑firm approval | Audit firms that do sustainability assurance need only one “key sustainability partner” who meets normal auditor requirements. | |
| Assurance standards | The European Commission will set “limited assurance” standards by 1 July 2027. | |
| Voluntary standards | Smaller companies (≤ 1 000 employees) can use a voluntary standard based on the Commission’s recommendation. | |
| Value‑chain limits | Companies can ask smaller suppliers (≤ 1 000 employees) for less information and can refuse to give more than the voluntary standard requires. | |
| Exemptions | 1. Companies that are not in the reporting scope can be exempted from the new rules for 2025‑2026. 2. Financial‑holding groups that own independent subsidiaries may skip consolidated reporting if the subsidiaries are independent. | |
| Due‑diligence scope | Only companies with ≥ €1.5 billion net worldwide turnover or ≥ 5 000 employees, or that receive ≥ €75 m in royalties or ≥ €275 m net worldwide turnover, must do due‑diligence. | |
| Due‑diligence process | • Companies must identify risks using available data. • They can ask partners for info only when needed. • If an impact can’t be avoided, they may suspend the partnership or use a corrective plan. | |
| Penalties | Maximum fine = 3 % of net worldwide turnover (or consolidated turnover for parent groups). | |
| Digital support | A dedicated portal will give templates, guidance and a standard data format. | |
| Reporting timeline | Companies that fall in the reporting scope must report from 2025, with full implementation of the new rules by 2029. | |
| Review | The Commission will report on the directive’s effectiveness every five years, starting 2029. |
In short, the directive simplifies sustainability reporting, limits it to the largest firms, makes audit and due‑diligence rules clearer, adds digital tools, and gives smaller companies an easier, voluntary path to reporting.
Licensing: The summaries on this page are available under Creative Commons Attribution 4.0 (CC BY 4.0).
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