The European Commission on Wednesday proposed sweeping changes to EU green rules, scrapping sustainability reporting requirements for thousands of companies and delaying its due diligence policy by a year.

Under the proposals, only companies with over 1,000 employees would be obliged to report on their environmental and human rights impact.

The rules currently target firms with over 250 employees, and the commission said the change would exempt 40,000 companies – or 80% of all firms the policy was originally designed to apply to.

The proposals will need to be negotiated and approved by the European Parliament and EU member states.