The EU Green Deal Framework for Corporate Sustainability

According to a Lathrop & Watkins article, the European Union (EU) Green Deal represents one of the most ambitious sustainability agendas worldwide. It intends to cut greenhouse gas emissions by 55% by 2030 and achieve climate neutrality by 2050. Rather than a single piece of legislation, the EU Green Deal framework for corporate sustainability is a package of policy initiatives. 

At the core of this framework are three cornerstone regulations: the Corporate Sustainability Reporting Directive (CSRD), the EU Taxonomy, and the Corporate Sustainability Due Diligence Directive (CSDDD). 

The CSRD expands disclosure obligations to thousands of companies and introduces the concept of double materiality, requiring firms to report on financial risks and environmental and social impacts. The EU Taxonomy defines sustainable activities, providing a standardized classification system to direct capital toward green investments. The CSDDD extends obligations into global supply chains, requiring companies to identify, prevent, and mitigate human rights and environmental risks.

In 2025, the European Commission introduced an Omnibus Package to simplify and recalibrate these rules. The reforms aim to reduce reporting burdens by up to 35% for subject-matter experts, while ensuring that Europe maintains its leadership in climate action. 

Notably, the Stop the Clock Directive postponed certain CSRD and CSDDD obligations. At the same time, a Detailed Directive proposes narrowing the scope of covered companies and introducing a Value Chain Cap to limit information requests from smaller suppliers. Revisions to the European Sustainability Reporting Standards aim to reduce the number of reporting datapoints by half and enhance usability.

While many sustainability-related frameworks emerging from the Green Deal are not impacted by the Omnibus Package, they are relevant to businesses operating within the EU. For affected companies, the changing requirements necessitate continuous adaptation and vigilance. For legal operations professionals, the EU Green Deal requires ongoing monitoring of reporting thresholds, supply chain due diligence, and assurance requirements.