This directive seeks to streamline corporate sustainability reporting and due diligence requirements while reducing administrative burdens. It limits the scope to large companies with over 1,000 employees and €450 million in revenue to ease compliance costs. Voluntary reporting standards for smaller supply chain entities aim to simplify data collection without overburdening them. The Commission is granted greater flexibility in setting audit standards to address sector-specific risks effectively. The proposal also aligns with global sustainability frameworks and existing EU regulations to ensure consistency and competitiveness.