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Please note regulatory timelines and requirements may change. The information in this blog is based on the most up-to-date information at the time of writing.
From delays to simplifications, 2025 has brought big shifts to the corporate sustainability landscape in Europe and it’s not over yet.
As the legislative landscape starts to take shape, we wanted to give a rundown of how the regulations are shaping up in the EU, and where things might go in 2026 and beyond. In this article, we’ll walk you through this, and explain what’s really changing. We’ll break down the state of play for some of the major EU rules shaping corporate sustainability today: CSRD, CSDDD, CBAM, and EUDR.
The Omnibus package published in February 2025, has caused a lot of debate in the corporate sustainability landscape. It addresses key regulations including CSRD (Corporate Sustainability Reporting Directive), CSDDD (Corporate Sustainability Due Diligence Directive), CBAM (Carbon-border Adjustment Mechanism), and EU Taxonomy. Its aim is to simplify reporting, reduce administrative burden, and increase competitiveness, but it has also created a lot of uncertainty.
This uncertainty remains centred around the scope and thresholds of CSRD and CSDDD. In other words, which companies must report and when these reports will be required. The table below outlines the different scope proposals brought forward by the EU institutions as of late October 2025. It’s important to keep in mind these are still at the proposal stage and amendments to CSRD and CSDDD are still possible.
After MEPs rejected the JURI’s (Committee on Legal Affairs of the European Parliament) mandate to go directly to trilogue, the Omnibus proposal was sent back to Parliament for further negotiations. A vote by MEPs is expected on November 13th.
Only after this vote, will the proposal go to trilogue negotiations between the European Parliament, Council, and Commission. This means the finalization of the Omnibus package is delayed again. While the aim to finalize the legislation remains the end of 2025, it is unclear if this timeline will be met, leaving businesses with uncertainty over the future of sustainability reporting and due diligence obligations.
Until amendments to the CSRD are made, wave 1 CSRD reporters (public-interest entities with over 500 employees) are expected to continue reporting, but they can use the simplified ESRS (European Sustainability Reporting Standards) adopted by the EU under the “quick fix” amendment, applicable from FY25.
The ‘Stop-the-Clock’ Directive (Directive (EU) 2025/794) delays reporting obligations by 2 years for wave 2 and wave 3 companies. This means wave 2 companies report in 2028 for FY27, while wave 3 companies begin reporting in 2029 for FY28.
The European Commission proposed the following key changes to the CSDDD as part of the Omnibus proposals simplification efforts:
Under the ‘Stop-the-Clock’ Directive, transposition of CSDDD is delayed by one year, giving member states until 26th July 2027 to transpose CSDDD into national law. There is also a delay of one year, with phase one beginning in 2029 (largest companies).
CBAM (Carbon-bored Adjustment Mechanism) has also been included in the Omnibus proposal, with the aim of simplifying and strengthening it. Following the EU Parliament's vote to formally adopt these changes, the CBAM simplification package has now been officially published in the Official Journal of the European Union, which is the final step in the regulation’s formal adoption process.
One of the biggest changes to CBAM is the exemption of 90% of importers from the scope of reporting. However, 99% of emissions remain in scope. This keeps accountability on the large players while easing compliance for small importers.
Small importers are classified as those importing under 50 tonnes/year of CBAM goods.
Other simplifications are being made for those remaining in scope of CBAM relating to:
and more.
CBAM becomes fully operational from January 1st 2026, you can read more about how to comply with CBAM in our CBAM blog series here.
Looking ahead, there is talk of extending the scope of CBAM sectors and products by 2030 so if you operate in a carbon intensive industry it may be worth beginning a carbon management strategy now.
The European Union Regulation on Deforestation-free Products (EUDR) entered into force in June 2023 and aims to tackle the problem of deforestation, reduce greenhouse gas emissions, and reduce biodiversity loss by requiring companies placing certain products on the EU market to demonstrate they are deforestation free.
The EUDR is undergoing simplification to reduce administrative burden and facilitate implementation. This has involved the release of a detailed guidance document, country benchmarking, and a draft Delegated Act.
The EUDR applies to companies who place a commodity or product covered by the regulation on the EU market or exports them.
In December 2024 the European Union decided to delay implementation of the EUDR by 12 months for large to medium sized companies (30th December 2025) and 18 months for micro and small enterprises (30th June 2026). However, following concerns about the IT system in place to support the EUDR, the European Commission has proposed a transitional period to strengthen the IT system and ensure a smooth transition. This means, the application of the EUDR for large to medium sized companies would remain the same - 30th December 2025 - while application of the EUDR for micro and small enterprises would be delayed by a further 6 months (2 years in total) until 30th December 2026. A 6 month grace period will apply to medium to large companies for checks and enforcement, allowing for rules to be gradually phased in.
The European Parliament and Council will now discuss this proposal with the Commission calling for the adoption of this proposal by the end of 2025.
The proposal also outlined other simplification measures including reduced reporting obligations for micro and small primary operators from low-risk countries.
The implementation timeline is shown below with current deadlines, and the proposed further delay for micro and small companies:
Commodities and products covered by EUDR include:
*It’s important to note that the current focus of the EUDR is on implementation, but the commodity and product list will be continuously reviewed and may be updated in the future so preparing supply chain data and due diligence now is helpful.
Taken from the European Commission draft Delegated Act, the following criteria must be fulfilled for commodities and products covered by the EUDR to be placed on or exported from the EU market:
The draft Delegated Act was published for public consultation from April - May 2025. We are now awaiting its finalization and adoption by the Commission. Although an official timeline for this has not been provided, it’s expected by late 2025.
Countries/ parts of countries have been benchmarked by the commission according to the level of risk they have of producing products that are not deforestation-free.
There are three categories:
If you source from a low risk country / part of country, simplified due diligence is required. If you source from a standard or high risk country, full due diligence is required, with stricter requirements for high risk countries. You can view the full list of countries here.
Compliance checks will be conducted by each member state’s appointed competent authority and this entails:
There have been concerns raised over these risk categories, and the methodology used to define the categories may be revised in 2026, however, for now the EUDR will use this system.
Non-compliance can result in:
Under the EUDR responsibility lies with the company placing a product or commodity covered by EUDR on the EU market.
If you report both CSDDD and EUDR, they are largely complementary, however, if there is conflict between EUDR and CSDDD reporting requirements, EUDR takes priority as it is sector-specific.
The EUDR and CSRD are also complementary. If you are a large company reporting to CSRD, data collected for EUDR compliance can be used for CSRD compliance where applicable, for example, biodiversity (ESRS E4) or value chain due diligence.
Despite the perception of rollbacks in corporate sustainability in the EU, sustainability is a business advantage and should not be viewed as a box ticking exercise. An analysis from PwC of more than 4,000 companies found that only 16% of those surveyed are getting less aggressive with their climate ambitions.
A sustainable business models give companies:
While 2025 has seen changes, delays, and simplifications in the sustainability reporting landscape, there is no denying that we are feeling the effects of climate change. Spain, where wildfires have burnt more than 400,000 hectares this year, have introduced mandatory carbon reporting as part of a climate emergency plan. Beyond Europe, regions and states are also pushing mandatory climate disclosures, for example, California’s SB253 requiring large companies operating in California to publicly disclose scope 1, 2, and 3 greenhouse gas emissions or UAE’s Federal Decree-Law No. (11) which mandates carbon reporting for scope 1 and 2 and plans to introduce scope 3 reporting.
This shows that regulatory momentum is still moving forward. Companies that prepare now will be better positioned for compliance and the sustainable transition.
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