EU: European Parliament Agrees Simplification to Due Diligence and Sustainable Reporting Requirements
On December 16, 2025, the European Parliament voted in favor of the Simplification Omnibus package, following a December 10 provisional agreement with the European Council. The vote puts an end to intense negotiations between the Parliament, Council and Commission after the Commission proposed the first Omnibus amendments in February 2025.
The text comprises simplifications to both the EU’s Corporate Sustainability Reporting Directive (“CSRD”) and Corporate Sustainability Due Diligence Directive (“CSDDD”), including raised thresholds for companies in scope, revised sustainability reporting standards, no requirement to adopt or implement a climate transition plan, and no EU-level harmonized civil liability regime (for more details, see our Client Update).
The text must now be formally approved by the Council. The amendments will enter into force 20 days after the text is published in the Official Journal of the EU.
Links:
Press Release
Agreed Text
EU: EU Sets Climate Target of 90% Emission Reduction by 2040
On December 10, 2025, the European Union reached a provisional agreement to set a legally binding target to reduce greenhouse gas emissions by 90% compared to 1990 levels, by 2040. Once approved, the target will be reflected in the European Climate Law.
To reach the target, European industries would be required to reduce emissions by 85%. Under the agreement, the EU would be able to make up the difference of 5% by using high-quality international credits, starting in 2036, after the conclusion of the pilot period scheduled for 2031-2035. The agreement also provides that the EU may use domestic permanent carbon removal systems to compensate for hard-to-abate emissions.
The provisional agreement must now be formally adopted by the European Parliament and European Council, and will eventually be published in the Official Journal of the EU.
Link:
European Commission Press Release
U.S.: Upcoming Public Hearing on California’s Climate Disclosure Regulation
On December 9, 2025, the California Air Resources Board (“CARB”) issued the proposed California Corporate Greenhouse Gas Reporting and Climate-Related Financial Risk Disclosure Initial Regulation (the “Proposed Regulation”). CARB also announced a public hearing to consider the Proposed Regulation, scheduled for February 26, 2026.
The Proposed Regulation seeks to implement disclosure obligations under California’s Climate Corporate Data Accountability Act (“SB 253”) and Climate-Related Financial Risk Act (“SB 261”). These laws require U.S. entities “doing business in California” with annual revenues over certain thresholds to disclose their Scopes 1, 2, and 3 greenhouse gas emissions and their climate-related financial risks, respectively. The laws mandate the creation of a fee program to fund the laws’ implementation. The Proposed Regulation addresses the establishment of these fee programs, and defines key terms necessary for the fee provisions, such as “revenue” and “doing business in California.” The Proposed Regulation also establishes August 10, 2026 as the deadline for entities subject to SB 253 to report Scopes 1 and 2 emissions.
The draft text of the Proposed Regulation is available online and a 45-day public comment period will run from December 26, 2025, through February 9, 2026. Written comments may be submitted here; oral comments may be provided during the hearing.
Links:
Public Hearing Announcement
Draft Text and Associated Materials
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