THE FACT THAT? The European Parliament has reached a political agreement to further dilute the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), reducing the number of companies required to monitor and address environmental and human rights risks in their supply chains.
THE DETAILS Under the new proposal, the CSDDD would apply only to companies with 5,000 or more employees and at least €1.5 billion in turnover, compared to the original threshold of 1,000 employees and €450 million. The revised framework significantly reduces the scope of the law, which was adopted in 2023 to force large companies to mitigate environmental and social damage or face fines of up to 5% of global turnover.
The compromise was negotiated between the centre-right European People’s Party (EPP), socialist and liberal groups Renew, after pressure from member states including Germany and France, and lobbying from multinational companies such as ExxonMobil. Some politicians, including Dutch socialist Lara Wolters, protested and warned that the move undermines corporate responsibility. The European Parliament is expected to vote on the revised text later this month, before starting negotiations with EU member states.
THE WHY? The review reflects a growing political shift away from Europe’s green and governance agenda, as policymakers seek to ease regulatory burdens on businesses amid economic headwinds. Critics argue that the changes risk weakening corporate responsibility standards, undermining the EU’s ambitions for ethical and sustainable supply chains before the directive comes into force due in 2027.
Fountain: Reuters
