The European Parliament voted on Oct. 22, 2025, to reject a proposal that would have simplified the European Union’s (EU) sustainability reporting and due diligence rules. The bill sought to narrow company-size thresholds and reduce specific disclosure requirements under the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD). Opponents of the bill said it went either too far in weakening climate accountability or not far enough in reducing compliance burdens. 

The vote underscores divisions in the EU over how to balance corporate reporting obligations with competitiveness. Supporters of reform argued that smaller firms face disproportionate costs, while opponents warned that broad exemptions could undercut Europe’s climate-policy credibility. The decision also highlights ongoing transatlantic pressure, with the United States reportedly urging the EU to pursue reductions in disclosure mandates.

The CSRD and CSDDD require large companies to disclose climate-related financial risks and ensure environmental and human-rights due diligence throughout their supply chains. The rejected proposal sought to narrow company coverage and simplify disclosure rules following complaints from businesses, like Exxon Mobile, about cost and administrative complexity. It is part of ongoing proposals to scale back both directives by raising reporting thresholds and delaying implementation.