EU Commission slashes rules designed to hold companies accountable for key human rights and environmental abuses in their supply chains.
The European Commission has announced deep cuts to its environmental and human rights reporting and due diligence standards exempting thousands of businesses from complying with public reporting requirements, with potentially dire consequences for workers across the world.
The Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) currently require companies to take action on due diligence in relation to human rights and environmental impact.
“This is a thinly disguised roll-back on workers’ rights under the pretext of slashing red tape and cutting costs”
But under the new Omnibus I package, the CSRD and the CSDDD face significant roll-backs, reducing the requirements for companies with less than 1,000 employees and a €450million turnover to monitor, report and address environmental and human rights abuses in their global supply chains.
Crucially, the changes to the due diligence rules create huge loopholes allowing businesses to only look at direct suppliers, where previously they were expected to monitor their entire supply chain including chains of sub-contracting.
By restricting the reach of due diligence laws, thousands of companies will have no obligation to identify, monitor and tackle potential abuses beyond their immediate contracts.
“This is a thinly disguised roll-back on workers’ rights under the pretext of slashing red tape and cutting costs” said Stephen Cotton, ITF’s General Secretary. “Hard-won labour rights safeguards are being watered down in response to corporate lobbying. By allowing corporations to act with impunity, the EU is effectively selling its own citizens down the river.”
“Despite warnings from trade unions and responsible businesses, the Commission moved forward with this proposal without proper transparency” said Livia Spera, General Secretary of the European Transport Workers’ Federation (ETF). “Scaling back sustainability laws won’t solve structural problems; it risks undermining European values and workers' rights."
Under the existing legislation, the rules apply to listed companies with as few as 50 employees and annual turnover of €8 million from 2026.
Other proposed amendments to the CSDDD include:
- Gutting of the civil liability regime
- New limits on stakeholder engagement
- Removal of the obligation to terminate a business relationship where all other efforts to address rights violations have failed
- Reduction in climate action obligations
- Reducing the frequency of periodic due diligence assessments
Without enforceable regulations protecting labour rights, vulnerable supply chain workers will be subject to abuse and exploitation while European businesses turn profit.
“This is wholesale deregulation which will significantly weaken protections for people and the planet. Responsible businesses and investors will find it harder to drive progress across their industries while unscrupulous corporations will now have a free pass to operate without consequences” added Cotton.
The ITF joins calls to the European Parliament and Council to reject the new proposal.
