EU Parliament delays corporate due diligence, sustainability rules

The European Parliament has voted to delay the implementation of key European Union (EU) laws on corporate due diligence and sustainability reporting, giving companies more time to prepare for the new requirements.

In a plenary session on Thursday, Members of the European Parliament (MEPs) overwhelmingly backed the European Commission’s proposal to postpone application dates, with 531 votes in favour, 69 against and 17 abstentions. The delay is part of a broader simplification package aimed at boosting the EU’s competitiveness.

European Parliament has approved a one-year delay to the EU’s new due diligence and sustainability reporting rules, giving member states until July 26, 2027, to implement them.
Affected large companies will now begin compliance from 2028.
Sustainability reporting requirements for medium and large firms will also be postponed by two years.

Under the revised timeline, member states will now have until July 26, 2027, to transpose the new due diligence rules into national law. These rules require large companies to identify and mitigate negative impacts on human rights and the environment throughout their value chains, the Parliament said in a press release.

The application of the rules for affected businesses has also been pushed back by one year. The first wave—comprising EU-based companies with more than 5,000 employees and turnover above €1.5 billion (~$1.64 billion), as well as non-EU companies generating equivalent turnover within the bloc—will now be subject to the legislation from 2028. The same applies to the second wave, which includes companies with over 3,000 employees and turnover above €900 million.

In addition, the Corporate Sustainability Reporting Directive (CSRD) will see a two-year delay for the second and third waves of companies. Large companies with more than 250 employees will now be required to begin reporting on their environmental and social impacts in 2028, covering data from the previous financial year. Listed small and medium-sized enterprises (SMEs) will follow suit in 2029.

The delay is part of the Commission’s ‘Omnibus I’ simplification package, unveiled on February 26, 2025. Alongside postponing implementation dates, the package also proposes changes to the scope and content of sustainability reporting and due diligence obligations. Work on that directive will now commence in the Parliament’s Legal Affairs Committee.

To accelerate the legislative process, the Parliament used its urgent procedure earlier this week. The final step will be formal approval by the Council, which already endorsed the same version of the draft law on March 26, 2025.

Fibre2Fashion News Desk (KD)