BlogpostESG regulation continues to evolve — and fast. In recent months, the European Commission and Council have proposed several changes to simplify and delay certain rules. At the same time, the expectations around transparency and responsible business are only increasing.
In this blog, we highlight the most relevant updates in ESG legislation and explain what they mean for your organization and supply chain.
A simpler EU Taxonomy — but only for some
One of the most significant proposals is a simplification of the EU Taxonomy. Companies would no longer need to classify activities that are considered non-material. For financial institutions, this means loans must only be included if they represent more than 10% of the total portfolio. For non-financial companies, only activities that generate over 10% of total revenue would need to be reported.
To further reduce the reporting burden, the Commission has also proposed cutting the number of data points by 64% for non-financial companies and by 89% for financial institutions. These changes aim to reduce complexity — especially for companies with limited sustainability exposure — but still require clear justification of what is considered “non-material”.
CSRD & CSDDD: Who’s still in scope?
The European Council has agreed on a more targeted approach to the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD). Their proposal would raise the company size thresholds significantly.
Only companies with more than 5,000 employees and €1.5 billion in turnover would be covered by CSDDD. For CSRD, the thresholds could increase to 1,000 employees and €450 million in turnover. These shifts are designed to reduce pressure on small and medium-sized businesses. Other proposed changes include a move toward a risk-based due diligence model, easing disclosure and mapping requirements, and pushing back climate transition planning obligations. The implementation of the CSDDD would also be delayed until 2028. While this means fewer companies are directly affected, the knock-on effects across the value chain remain strong. Large companies still need to report — and that means asking suppliers to provide more data, more transparently.
Despite the setback in the CSRD adaptation, The European Commission adopted the Voluntary Sustainability Reporting Standard for non-listed Micro-, Small-, and Medium-sized Enterprises (VSME) released by EFRAG in December 2024. This Standard, developed by EFRAG for undertakings with less than 250 employees, as part of the 2023 SME Relief Package (Action 14), provides a simple and streamlined framework for non-listed SMEs to report sustainability-related information.
GRI goes digital with its new taxonomy
GRI has launched a digital version of its reporting standards using XBRL, a language that allows structured and machine-readable disclosures. This makes sustainability data easier to submit, compare and analyse — both for companies and their stakeholders.
The GRI Taxonomy supports all GRI Standards (Universal, Sector and Topic) and is closely aligned with ESRS. It helps bridge the gap between companies and data users — including investors, regulators and auditors — and paves the way for more efficient reporting.
This step towards digital sustainability disclosure reflects a broader shift in ESG: from narrative-based reporting to data-driven accountability.
Green Claims Directive: What’s going on?
The Green Claims Directive, meant to crack down on greenwashing, has had a turbulent ride in recent weeks. After media reports suggested the EU had withdrawn its support, Italy pulled out, blocking the process. But shortly after, the European Commission clarified that it had not withdrawn its support.
Despite the confusion, the intention behind the directive remains clear: companies must be able to back up environmental claims like “climate neutral” or “eco-friendly” with evidence. Whether or not this particular law is passed, transparency and credibility in marketing are becoming non-negotiable.
Postponement of Battery Due Diligence Obligations
In May 2025, the European Commission proposed a two-year delay for the due diligence obligations under Regulation (EU) 2023/1542 (the EU Battery Regulation), shifting the compliance deadline to 18 August 2027. This postponement is part of the “Omnibus IV” legislative package and aims to give businesses more time to prepare — including the designation and accreditation of Notified Bodies and alignment with the Corporate Sustainability Due Diligence Directive (CSDDD).
The original timeline for other aspects of the Battery Regulation — such as labelling, collection targets, and Extended Producer Responsibility (EPR) — remains unchanged and will still come into force on 18 August 2025. The extended timeline for due diligence specifically is meant to ensure a smoother rollout of the more complex requirements, including third-party audits and regular reporting. It also provides breathing room for companies, especially those with turnover above €40 million, to properly integrate ESG standards and supply chain transparency into their operations.
ESG is changing — but not going away
Some rules are being simplified or postponed, but that doesn’t mean companies can afford to wait. ESG legislation continues to evolve, and expectations from regulators, consumers and investors are only increasing. Taking action now means you’re better prepared for what’s next.
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