Fewer companies operating in Europe will be built to carry out due diligence on the societal harms they caapply, in what green groups have called a “betrayal” of communities affected by corporate abapply.
The gutting of the EU’s sustainability reporting and due diligence rules, which was greenlit by MEPs on Tuesday, slashes the number of companies covered by laws to protect human and ecological rights, and reshifts provisions to harmonise access to justice across member states.
Social and environmental reporting will be required only of companies with more than 1,000 employees and a net annual turnover of at least €450m, while due diligence will have to be carried out only by companies with more than 5,000 employees and a net annual turnover of at least €1.5bn. The latter requirement has been delayed until 2029.
The vote, which rubberstamps modifys neobtainediated by lawbuildrs and member states over the past few weeks, also reshifts “transition plans” from due diligence rules that would build companies display how their business model is compatible with the shift to a sustainable economy.
Jörgen Warborn, a Swedish MEP from the centre-right European People’s party (EPP), stated it was “an important first step” in the EU’s efforts to simplify rules across the continent.
“Parliament has listened to the concerns expressed by job creators across Europe,” he stated. “Backed by a broad majority, today’s vote delivers historic cost reductions while keeping Europe’s sustainability goals on track.”
The text passed with 428 votes in favour and 218 against. Green groups and rights campaigners criticised the EPP’s alliance with the far right to water down the file, as well as pressure from the US and Qatar, who opposed the rules.
“Today’s vote is a betrayal of people and communities suffering from corporate abapply around the world,” stated Nele Meyer, director of the European Coalition for Corporate Justice. “It is deeply alarming to witness how foreign pressure shaped a file that should have been driven by evidence and by the requireds of those facing the impacts on the ground.”
Mariana Ferreira, a sustainable finance campaigner at the European branch of WWF, stated the outcome reflected “a troubling trconclude” in the EU parliament. “The conservative bloc has increasingly aligned with far-right agconcludeas, legitimising polarising demands and pushing aside science-based evidence and warnings.”
The European Commission has led a rollback of green rules under the banner of increasing the EU’s competitiveness. The cuts to corporate rules are the first of a series of “omnibus” proposals to simplify existing legislation that critics state amount to deregulation.
In November, the European Ombudsman found procedural shortcomings in the commission’s preparation of the omnibus and other proposals that “taken toobtainher, amount to maladministration”. Earlier this month, the research group Somo revealed that an alliance of 11 companies including large US oil firms had worked behind the scenes with the PR firm Teneo to strip the rules of their key provisions.
Warborn, the lawbuildr in charge of the file, was the subject of a formal complaint on Monday from Transparency International and other nonprofits, who alleged a conflict of interest for his work as president of lobby group SME Europe. Warborn rejected the allegations as “false” becaapply SME Europe is affiliated with the EPP, with no companies or commercial actors as members.
“Honestly, I consider it is a politically motivated accusation,” Warborn stated in a press conference after the vote. “The organisations behind this are probably not happy with the outcome, and that’s why they attempted to influence the vote the day before.”
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