'PRESS RELEASE – EU’s “Deregulation” agenda claims its first victim: Corporate Sustainability Due Diligence Directive gutted'

The European Parliament has today approved the sweeping Omnibus I deregulation package, a move that significantly weakens key EU corporate accountability laws – including the landmark Corporate Sustainability Due Diligence Directive (CSDDD).

Under the guise of cutting red tape for business, lawmakers have instead gone much further, stripping the CSDDD of essential human rights and environmental protections...

But the fight for corporate justice is far from over. Member States now have less than three years to incorporate the CSDDD into national law, and crucially, can still correct the damage they allowed to be done in Brussels. This will require bold political leadership to restore and strengthen core protections, and to put people and planet before profit and corporate capture that is threatening our democracies.

Corporate power over public interest: a cautionary tale for deregulation

Today’s vote caps months of intense corporate lobbying, foreign political pressure, and the European People’s Party (EPP) handing over power and influence to climate-denying groups in the Parliament to secure the law’s passage and gut its climate obligation.

A recent investigation by the Dutch NGO SOMO uncovered how a secretive alliance of eleven multinational companies – including some of the most powerful fossil fuel interests in the world – conspired to derail the EU’s flagship supply chain...

These efforts were amplified by foreign political pressure, including a joint letter from senior US and Qatari government officials urging EU leaders to scale back the CSDDD...

This level of influence over EU lawmaking sets a dangerous precedent and one that risks seriously undermining democratic accountability and the EU’s credibility as a leader on human rights and sustainability.

A mixed outcome for corporate accountability

Despite the highly compromised Omnibus process, the CSDDD survives. Crucially, the final law still sets some ground rules for corporate accountability, including:

• Establishing a legal duty for large companies to respect human rights and environment throughout their global value chains
• Requiring companies to identify, prevent, stop and remediate harm to workers, communities, and the environment in the EU and abroad
• Obligating Member States to ensure full compensation for victims of corporate abuse when companies are found civilly liable, allowing those harmed by due diligence failures to obtain remedies before national courts

These core elements, though weakened, remain a foundation to build on.

Nele Meyer, Director of ECCJ, said:

“Today’s vote is a betrayal of people and communities suffering from corporate abuse around the world. By cutting a key binding duty that would have compelled the biggest emitters to lower their emissions, EU lawmakers have handed powerful fossil fuel interests exactly what they demanded... While the protections have been weakened, the core due diligence duty remains. Now the law must be implemented in a way that delivers real protection for people and the planet”.

Due Diligence after the Omnibus

Member States now have until July 2028 to transpose the Directive into national law.

It is essential that governments use this process to strengthen and improve the CSDDD, ensuring that national legislation fulfils the Directive’s original purpose.

Key areas where Member States can improve on the CSDDD:

• Lower employee and turnover thresholds for in-scope companies so that more businesses are required to conduct due diligence
• Adopt robust civil liability provisions to ensure that companies can be held accountable and victims can obtain effective remedies
• Ensure their civil liability regimes are of overriding mandatory application for CSDDD-related claims
• Require companies to adopt and implement climate transition plans, and empower supervisory authorities to monitor compliance...

Risk-based approach preserved but significant restrictions remain

...Despite earlier attempts by the Commission and the Council to weaken it, the risk-based approach has been preserved in the Omnibus I package as approved by the EP. Companies are therefore still required to identify and assess risks across the operations of both direct and indirect business partners. This represents a significant win, bringing the CSDDD into closer alignment with international standards...