- Corporate Sustainability Rules Narrowed After Council Approval: EU Member states have up to a year to integrate the revised CSRD rules and until July 2028 for the CSDDD changes.
- India SEBI Forms Working Group to Strengthen ESG Ratings Transparency: SEBI has launched a formal review of its ESG ratings regulations, citing feedback from market participants and stakeholders on the existing framework.
- Shipping Regulators Move Forward on Batteries, Wind and Nuclear Safety Standards: Draft amendments on propulsion systems, underwater noise and emergency shutdown procedures now head to the Maritime Safety Committee for approval.
EU simplifies ESG framework, raises employee and revenue thresholds
The European Council has approved revisions to the bloc’s sustainability reporting framework, formally narrowing the scope of both the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) after months of negotiations. The updated thresholds mean the CSRD will apply only to companies with more than 1,000 employees and €450 million in revenue, while the CSDDD will cover EU firms with over 5,000 employees and €1.5 billion in revenue. Law firm Ropes & Gray estimates that the changes will remove about 90% of companies from the CSRD’s scope and 70% from the CSDDD’s coverage.
The first wave of CSDDD compliance has been pushed to 2029, and the revised rules drop the requirement for companies to adopt and publish a transition plan. Marilena Raouna, deputy minister for European affairs of Cyprus, said the package reduces “unnecessary and disproportionate burdens on our businesses, with simpler, more targeted and more proportionate rules.” The changes also eliminate EU-level liability and cap penalties at 3% of global net revenue, with enforcement handled nationally.
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Further reading: European Council adopts simplified sustainability reporting laws
Deep dive into the change ESG framework
Europe’s effort to craft world-leading corporate sustainability laws has hit a political breaking point, as member states and industry pressure led the European Union to simplify and weaken key rules on sustainability reporting and due diligence. In late February, EU countries gave final approval to narrow the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD), limiting their scope to the very largest firms. Critics note the requirement for climate transition plans was also dropped, a move that some see as undermining the bloc’s own climate strategy.
The changes followed intense lobbying from business groups and foreign governments warning that earlier, broader rules would hurt competitiveness and disrupt trade, including letters from the U.S. and Qatar raising concerns over impacts on energy exports and investment.
Stakeholders have also raised concerns about the trend toward dilution. As reported, industry and governments argued that “EU red tape and strict regulation hindered competitiveness with foreign rivals,” a point noted by observers of the negotiations.
“This will risk creating a disastrous lack of ESG data across the region: a nightmare for responsible investors and consumers. This new package guts corporate accountability,” said Giorgia Ranzato, sustainable finance manager at Transport & Environment.
On the broader legislative path, one stakeholder summary of the December deal noted: “the agreement made additional changes to the current regulations … including removing the CSDDD’s obligation for companies to prepare climate transition plans.”
These quotes highlight contrasting views on the EU’s regulatory shift, from fears of reduced transparency to calls for balanced simplification without losing climate and sustainability ambition.
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Further reading: EU countries give final approval to weaken company sustainability laws
Further reading: Europe plans to ease sustainability reporting rules to compete globally
Further reading: EU Omnibus I Directive published in the Official Journal of the EU
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India launches review of ESG ratings regulation framework
India Moves to Update Rules Governing ESG Rating Providers
Photo Credit: Wikimedia Commons / Securities Exchange Board of India
The Securities and Exchange Board of India (SEBI) has initiated a fresh review of the regulatory framework governing ESG Rating Providers, signaling a reassessment of how sustainability ratings are supervised in the country. The move follows SEBI’s 2021 “Master Circular for ESG Rating Providers,” which formally brought ESG ratings firms under its regulatory structure for credit rating agencies. According to the regulator, the decision to reopen the framework comes after feedback from market participants and stakeholders regarding the current framework.
SEBI’s newly formed working group includes representatives from issuers, investors and ESG rating users, along with domestic and global ratings providers, analysts, legal specialists and academics. The group has been tasked with conducting a comprehensive evaluation of the existing rules, considering stakeholder suggestions, and recommending steps to strengthen “transparency, reliability and confidence in ESG ratings.” It will also review international regulatory developments and identify areas where India’s framework can better align with global best practices.
The review shows the increasing weight ESG ratings carry in investment decisions. As global regulators sharpen oversight of methodologies, SEBI appears intent on reinforcing credibility while ensuring India’s framework remains consistent with emerging international standards.
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Further reading: India Launches Review of ESG Ratings Provider Regulations
Editor’s Note: The opinions expressed here by the authors are their own, not those of impakter.com — In the Cover Photo: Europe Scales Back CSRD and CSDDD Scope, Delays Compliance Deadlines. Cover Photo Credit: Antoine Schibler