Simplification of sustainability reporting requirements

Publication of sustainability information: fewer companies affected 

The European CSRD Directive requires companies to publish sustainability information in their annual management reports.  

Directive 2026/470 now limits this requirement to companies that meet all of the following conditions: 

• net revenue exceeding 450 million euros; 
• an average of more than 1,000 employees.  

These companies will be required to produce a sustainability report in accordance with the amended rules starting in 2028. The report will cover the 2027 fiscal year.  

As of that date, many companies will therefore fall outside the scope of the regulation.  

Early exemption possible as early as 2026 in Belgium 

Regarding “Wave 1” companies, which are currently already subject to reporting requirements but do not meet the new thresholds, the directive provides that they will be automatically exempted starting with the 2027 fiscal year.  

However, the directive allows Member States the option to apply this exemption earlier. 

In accordance with the European directive, on March 27, 2026, the federal government approved a draft bill allowing for the exemption of “Wave 1” companies as early as the 2026 fiscal year. 

These companies would therefore no longer be required to prepare and publish sustainability disclosures for the 2026 fiscal year and subsequent years. 

What is the timeline?  

The federal government has submitted the draft bill to the Council of State for its opinion. 

Following this opinion, the federal government will submit the bill to Parliament for adoption. 

The other provisions of the directive must be transposed into national law by March 19, 2027, at the latest.  

Another change: value chain and new right of refusal for SMEs  

The value chain refers to all the partners with whom a company collaborates (suppliers, subcontractors, distributors, etc.). 

The initial rules required companies to collect information and analyze risks related not only to their own activities but also to those of their partners.  

In practice, this resulted in sometimes significant demands placed on SMEs, even when they were not themselves subject to reporting obligations.  

Directive 2026/470 now limits these requests. Companies with fewer than 1,000 employees (so-called “protected companies”): 

• may refuse to provide information beyond voluntary standards;  
• have an explicit right to resist excessive requests;  
• are not bound by conflicting contractual clauses.  

Takeaway 

Directive 2026/470 marks a significant reduction in European obligations regarding the disclosure of sustainability information. These obligations are now focused on (very) large companies.  

For many companies, the reporting requirement is eliminated. 

SMEs, however, remain indirectly affected through the value chain, but some now benefit from a protective framework against excessive requests. 

In Belgium, “Wave 1” companies that fall below the new thresholds must monitor the progress of the draft bill. If the Parliament adopts the Act, they could benefit from an early exemption covering the 2026 fiscal year.  

Source:

• Directive (EU) 2026/470 of the European Parliament and of the Council of 24 February 2026 amending Directives 2006/43/EC, 2013/34/EU, (EU) 2022/2464 and (EU) 2024/1760 as regards certain corporate sustainability reporting requirements and certain corporate sustainability due diligence requirements 
• Draft bill amending Article 116 of the Act of 2 December 2024 on the disclosure of sustainability information and the assurance of sustainability information by certain companies and groups, and containing various provisions, with regard to the date of entry into force for public-interest entities