EU agrees to weaken and delay corporate sustainability and supply chain due diligence rules, scaling back environmental reporting and human rights obligations.
BRUSSELS: European governments and lawmakers have agreed to weaken and delay key environmental and human rights rules for businesses.
Negotiators reached an overnight deal to “simplify” two major pieces of legislation, the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).
“We delivered on our promise to remove burdens and rules and boost EU’s competitiveness,” said Marie Bjerre, the European affairs minister for Denmark, which holds the EU’s rotating presidency.
The deal reflects a shift in the bloc’s focus towards competitiveness and away from the climate goals championed during European Commission President Ursula von der Leyen’s first term.
The CSRD, which requires large firms to report on climate impacts, will now only apply to companies with over 1,000 employees and a net turnover of at least EUR 450 million.
The CSDDD, which demands companies fix human rights and environmental impacts in their supply chains, will apply only to firms with over 5,000 employees and EUR 1.5 billion in turnover.
The deadline for companies to comply with the CSDDD has been pushed back by one year to July 2029.
The agreement also completely removes the obligation for companies to adopt a transition plan for climate change mitigation.
It further does away with a European civil liability regime for breaches, referring companies to national legislation instead.
German Green lawmaker Anna Cavazzini accused conservatives of having “hammered the final nail in the coffin” of the law seeking to clean up corporate supply chains.
The CSDDD was proposed in 2022 and its approval in 2024 was hailed as historic for global working conditions and the planet.
The provisional deal now needs official endorsement by the European Council and Parliament before formal adoption.
