The most radical cuts proposed affect the CSDDD, notably trimming the definition of supply chains to include only direct suppliers. This change could fundamentally undermine the concept of corporate responsibility throughout supply chains. ..

The exemption for financial institutions is a striking illustration of lobbying influence at the EU level, highlighting how powerful special interests can sway policymakers. Given the Commission’s heavy reliance on lobby group input for the omnibus package and preferential consultation access granted to corporate representatives, scrutinising the CSDDD lobbying success is vital to avoiding similar mistakes today.

The CSDDD was originally conceived to hold large companies accountable for human rights abuses and environmental harm throughout their supply chains. The initial proposal from February 2022 explicitly included the financial sector, recognising finance’s significant leverage over corporate behaviour. This measure aimed to prevent banks and investors from financing harmful business practices by requiring them to undertake due diligence on companies they support.

…finance industry lobby groups were divided…

A significant opponent at the time was the US asset management giant Blackrock, which pushed for the asset management industry’s exclusion, arguing that investment firms lack direct relationships with investee companies and thus should not be held accountable. France reportedly backed this stance…