Turbulent weeks for European sustainability legislation
In recent weeks, an extraordinary amount of stir has taken place within European sustainability legislation. The debate is becoming increasingly politically polarized and risks losing sight of the core of sustainable business: economic resilience. Three major topics — CSRD Omnibus, ETS2 and EUDR — have evolved rapidly. But remember: these are only three files within a much larger pipeline of dozens of regulatory packages that will affect your business operations now or in the near future. Do not underestimate this.
CSRD Omnibus: the European Parliament cuts even further
The Corporate Sustainability Reporting Directive (CSRD) requires companies to report extensively on their sustainability impact. The goal of the Omnibus package is simplification, but the relaxations — approved by the European Parliament on 13 November — again go much further than expected.
The newly proposed thresholds for CSRD are: more than 1,750 employees AND €450 million turnover.
This goes far beyond the original Commission proposal (1,000 employees).
Final negotiations between Parliament, Council and Commission have now begun. A definitive decision is expected by the end of 2025.
What does this mean for your company?
Even if you are out of scope — or were never in scope to begin with — the economic impact of sustainability eventually lands on your desk, as we outlined in our earlier article.
Even if reporting stops, the economic impact won’t.
EUDR: no postponement, yes postponement… what will it be?
The EU Deforestation Regulation (EUDR) ensures that products such as timber, coffee, cocoa, soy, palm oil, beef and rubber entering the EU market do not contribute to deforestation.
After speculation about a delay, the European Commission opted for a pragmatic approach: the deadlines remain unchanged, but implementation will be simplified.
The Commission’s proposal:
- 30 December 2025 – large and medium-sized companies
(with a 6-month grace period for enforcement until 30 June 2026) - 30 December 2026 – micro- and small enterprises
Key simplifications:
- Only the first market operator in the chain must submit a due-diligence statement (DDS).
- Downstream parties and traders only need to pass on the reference number received from their supplier.
- Micro and small operators from low-risk countries receive additional exemptions.
However, Parliament and Council must still approve this proposal. Meanwhile, on 17 November the Council submitted its own proposal for a 12-month delay.
Parliament votes on 26 November. After that, negotiations (trilogue) begin between Council, Parliament and Commission to reach a final agreement before 30 December 2025.
If this fails, the EUDR automatically enters into force without delay.
What now?
It is frustrating, but the only safe strategy is: prepare for the worst-case scenario (30 Dec 2025), but invest smartly and in phases.
ETS2: one extra year of breathing room
ETS2 is the European emissions trading system that sets the cost of CO₂ emissions from fossil fuels in the building sector (heating) and road transport (cars and trucks). Companies pay for their emissions via emission credits, making fossil fuels like gas and diesel significantly more expensive for all end-users.
In early November, the EU Council’s climate ministers decided to postpone ETS2.
The new start date is 2028 instead of 2027.
At the same time, the European Commission is working on stability measures, including the possibility of early auctions, a mechanism to cap price increases and additional time to roll out compensation schemes. Complicated, in other words!
The common thread: volatility, but unchanged drivers
What do these three dossiers have in common? Political volatility, but stable underlying drivers. Banks continue to request sustainability data, insurers assess climate risks, supply-chain dependencies remain, and customer expectations evolve accordingly. And do not underestimate how quickly new regulations continue to accumulate.
One thing is certain: sustainability will increasingly have economic and financial impact on your company.
Pragmatic steps to manage this volatility
- Conduct at least a Quick Scan – know your “Value at risk?”
Where are your risks? Where are the opportunities? How does sustainability legislation affect your business? A Quick Scan is a low-threshold and very affordable way to avoid surprises. - Identify quick wins
Think of energy savings, waste reduction, and more efficient logistics. These measures generate immediate economic returns. Also scan available subsidies. - Define relevant KPIs and evaluate regularly
Action beats perfection. Start measuring what matters. - Stay informed
Sustainability legislation evolves continuously and from different directions. Staying up to date allows you to act proactively.
A Quick Scan is essentially a low-cost insurance policy to avoid financial surprises.
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