...The EU’s Corporate Sustainability Due Diligence Directive (CDDDD), Corporate Sustainability Reporting Directive (CSRD), Taxonomy Regulation and similar laws emerged from the clear consensus that ‘business as usual’ is no longer an option. Accelerating climate change, human rights abuse, vulnerable supply chains, conflict, rising global inequality and dwindling public trust have both affected and been exacerbated by corporate activity. The EU’s sustainability framework is key for financial stability, as the European Central Bank has repeatedly stated, for future competitiveness and resilience of European businesses, and for workers and communities along global value chains.

However, we are concerned that the Omnibus process as it currently stands is jeopardising this carefully balanced and flexible framework. Much of what is on the table does not deliver simplification but makes laws less efficient and effective, risking burdensome tick-box compliance with limited impact for sustainability and the protection of people’s rights.

Therefore, in particular, we propose the following guardrails for negotiations:

1. Many of the proposed Omnibus changes are grounded in flawed assumptions and lack proper assessment of impacts, including for companies. For instance, the original CSDDD already takes into account that companies cannot possibly go supplier-by-supplier but rather creates a legal frame in which to prioritise smart, risk-based action on where in the supply chain it really matters, across all tiers. The Omnibus model of focusing due diligence to ‘tier 1’ of supply chains increases the risk of bureaucratic company box-ticking and blanket queries to European SMEs.
2. Similarly, eliminating the EU-harmonised civil liability norm increases fragmentation and uncertainty for both companies and rightsholders.
3. Radically reducing scope misses the fact that proportionality of efforts to company size and risk exposure has always been a key feature of due diligence and reporting laws, and that a critical mass of companies covered, along with credible accountability, is needed for a level playing field to work.
4. Weakening climate-related obligations is counter-productive given the scale of the climate emergency, and also exposes companies and member states to litigation risks, especially in the light of the recent advisory opinion of the International Court
   of Justice.
5. There is still time to focus change on genuine simplification through definitions, guidance and technical standards. The ongoing review of European Sustainability Reporting Standards (ESRS) under the CSRD demonstrates that further – in this case far-reaching – simplification and harmonisation of existing laws can be addressed and consulted without amending the primary legislation.

We urge you to use this period of negotiation to recalibrate, focus on true simplification and harmonisation, and maintain European leadership on sustainability regulation which has already attracted the attention of many countries and a keen following across all world regions...