EU Parliament Simplifies Corporate Supply Chain Reporting and Due Diligence Requirements

On November 13, 2025, the European Parliament approved a legislative package that significantly simplifies and narrows the scope of environmental and human rights due diligence and reporting obligations under the EU Supply Chain Law. Under the new rules, only very large companies—those with more than 1,750 employees and a net annual revenue exceeding €450 million—will be required to submit social and environmental reports. Due diligence obligations will apply exclusively to the largest companies, defined as having over 5,000 employees and a net revenue above €1.5 billion, allowing them to primarily rely on existing data rather than systematically collecting information from smaller supply chain partners (143996, 143998).

The reporting standards themselves have been simplified, demanding less qualitative information, with sector-specific reporting now voluntary. Importantly, smaller companies will be shielded from burdensome reporting requirements, as their larger partners cannot compel them to provide information beyond voluntary standards. Unlike previous expectations, companies will not be obligated to submit transition plans aligned with the Paris Agreement goals. Furthermore, enforcement mechanisms, including fines for non-compliance, will be determined at the national level by member states in coordination with the European Commission, rather than a unified EU approach (143998).

The Parliament also endorsed the creation of a digital portal intended to provide free templates, guidelines, and information to assist companies in fulfilling their reporting duties, complementing existing EU data access initiatives. Negotiations with EU member states are set to begin imminently on November 18, with the aim of finalizing this legislation by the end of 2025. This reform is part of the broader “Omnibus I” simplification package launched by the European Commission earlier this year (143998).

Environmental groups have strongly criticized these changes, condemning the EU Parliament’s decision as a severe betrayal of decades of progress on environmental and human rights standards. They describe the legislative outcome as a “Harakiri majority” that weakens protections and may increase risks of abuses and environmental harm. The vote passed with the support of the European People’s Party (EVP), who allied with far-right groups, prompting accusations of political collusion against democratic and environmental principles (143996). Critics urge civil society and stakeholders to mobilize against what they perceive as a deregulatory trend with serious consequences for sustainability and human rights accountability in corporate supply chains.