The changes would weaken corporate sustainability rules for a large majority of businesses currently covered by the requirements and are in response to criticism from some industries that EU red tape and strict regulation hinder competitiveness with foreign rivals.

EU negotiators agreed that social and environmental reporting will apply only to companies with more than 1,000 employees and annual net turnover above €450 million (US$523.85 million).

For non-EU firms, the threshold for sustainability reporting was set at €450 million in turnover generated within the bloc.

Under the deal, only the largest EU corporations – those with over 5,000 employees and annual turnover exceeding €1.5 billion – must conduct due diligence to curb harm to people and the planet. The same rules will cover non-EU companies with turnover in the EU above that level.

The EU Parliament and EU countries must each give formal approval to the changes before they pass into law. That step is usually a formality that waives through pre-agreed deals.