CSRD opinion piece. Last updated: June 14th, 2025
As Head of Sustainability at Code Gaia, Phillip brings over 20 years of hands-on experience in corporate environmental and ESG management. A seasoned specialist in corporate sustainability action and reporting, he has been pivotal in designing and operationalising cutting-edge approaches for double materiality, digital reporting, and regulatory compliance. Phillip has been at the forefront of taking learnings from the most up-to-date sustainability best practices and research and leveraging this for organisations in a consistent and comprehensible way.
Recent developments in Brussels show that the path to implementing a “simplified” CSRD is anything but settled. Behind the scenes, a political struggle is unfolding—between those claiming relief for European businesses and others who oppose what they see as dilution of the EU’s green transition commitments.
The Political Landscape: Competing Visions, Conflicting Interests
As the CSRD moves through the “Omnibus” related legislative process in 2025, it has become clear that no single vision for its future has won out.
A detailed matrix of proposals from various political factions, published in early July 2025, illustrates just how fragmented the landscape is. Key political actors from the European Commission and European Parliament to the European Central Bank and individual MEPs have staked out differing positions on the scope, thresholds, and intensity of sustainability reporting.
At the heart of the debate lies a fundamental question: How far should Europe go, and how fast, in demanding sustainability disclosures from its corporate sector?
Technocrats and Politicians: Competing Logics and Positions
The European Commission’s Omnibus proposal claims a pragmatic stance, aiming to reduce the burden on companies by raising the reporting thresholds and potentially limiting the number of companies in scope to around 10,000, down from many thousands more. This move is framed as a way to cut red tape and support economic competitiveness in a challenging global environment.
But not all actors are on board. Some companies, financial institutions and MEPs, particularly from the Greens/EFA and progressive factions, argue that this approach undermines the very intent of the CSRD and risks slowing the EU’s sustainability momentum. The authors of the various dual scope approaches (Prof. Dr. Ulrike Stefani and Carsten Ernst) propose a nuanced middle path that introduces a reduced-scope reporting regime for medium to large companies (those with 500–1,000 employees), while preserving the full scope for larger entities.
These dual approach models attempt to balance the competing goals of reducing bureaucratic overhead and maintaining robust sustainability standards, but even this compromise faces resistance from different sides of the aisle.
What’s at Stake in the Numbers
The most concrete manifestation of this debate lies in the threshold definitions:
- Current CSRD: Applies to companies exceeding two of the following three criteria: €25 million in assets, €50 million in turnover, or 250 employees.
- European Commission’s Proposal: Raises the employee threshold to 1,000, effectively shrinking the number of reporting entities.
- EPP (Parliamentary Majority): Threshold raise to 3,000 employees or more and €450 million annual revenues.
- Dual-scope Approaches : Propose maintaining lower thresholds (e.g., 500 or 250 employees) but introducing a simplified ESRS set for the smaller undertakings, possibly similar to the originally proposed, but never finalised LSME standard.
- ECB Proposal: Supports a dual-scope approach with 500 and 1,000 employee thresholds.
Each of these proposals reflects a different political calculus. Some seek to shield mid-sized enterprises from costly compliance obligations. Others prioritize harmonisation and transparency across the EU market.
Why the Outcome Is Still Uncertain
What’s striking from the most recent summaries (as at early July 2025) is that there is no clear political consensus yet. Final proposals from the European Parliament are not expected until October, and trilogue negotiations are slated for November. That means the final shape of the CSRD (and by extension, significant elements of the regulatory future of corporate sustainability in Europe) is still very much in flux.
Despite Omnibus claims of certainty, the back and forth on this issue retains some of the very uncertainties that the EU commission originally intended to solve. Businesses who had started reporting in 2024 (subject to the first wave one threshold) and those subject to stop the clock delays are still asking what reporting scope they should prepare for and what thresholds will apply when the dust settles.
A Moment of Strategic Reflection
At this moment of uncertainty, one thing is clear: the outcome of the CSRD amendment process will not be decided solely by technical arguments. It will be shaped by broader political considerations about economic resilience, regulatory burden, and Europe’s role in leading the global sustainability transition.
Whether you’re a sustainability officer, a CFO, a policymaker, or an ESG analyst, the message is the same: stay alert. The next six months will be critical in defining the balance between ambition and pragmatism in EU sustainability regulation.
Until then, the CSRD remains not a finished directive but a live debate.
