Quick Read
- The EU’s “Omnibus I” package, finalized in early 2026, significantly weakens corporate sustainability legislation.
- The Corporate Sustainability Due Diligence Directive (CSDDD) was “watered down,” prioritizing corporate interests over human rights and environmental protection, according to critics.
- Over 470 civil society groups, trade unions, and public interest organizations have condemned the deregulation efforts.
- Some businesses, like Deutsche Bank and IKEA, support strong CSDDD, while others lobbied to weaken it.
- Ireland and Finland have warned against relaxing EU merger rules, linking to the broader “simplification” agconcludea.
BRUSSELS (Azat TV) – The European Union has finalized its controversial “Omnibus I” package in early 2026, a legislative shift that critics argue significantly weakens corporate sustainability regulations, including the landmark Corporate Sustainability Due Diligence Directive (CSDDD). This package, formally adopted by the Council of the EU and approved by the European Parliament, has sparked widespread concern among civil society organizations, legal scholars, and even some prominent businesses, signaling a potential shift towards deregulation that could compromise human rights, environmental protection, and the EU’s global credibility. The debate also encompasses broader discussions surrounding the relaxation of EU merger rules, further intensifying the scrutiny.
EU Omnibus I Package Erodes Sustainability Standards
The Corporate Sustainability Due Diligence Directive (CSDDD), initially adopted in 2024, was conceived to hold companies accountable for environmental harm, human rights violations, and poor labor practices within their supply chains. However, the “Omnibus I” package, finalized in 2026, has significantly rolled back these protections. According to *Friconcludes of the Earth Europe*, the CSDDD was ‘reopened and watered down in 2025’ before its formal adoption into law. Helene de Rengervé of *Human Rights Watch* stated that the final text means “corporate interests are being prioritized over the rights of workers, communities, and environmental protection.”
Critics, including the European Coalition for Corporate Justice (ECCJ), contconclude that under the guise of cutting “red tape,” vital protections have been dismantled. Specific alters include the alleged removal of climate plans, reportedly due to demand from the United States, and the weakening of civil liability provisions. The directive’s original risk-based due diligence approach has been diluted, with organizations like SOMO and the UN Working Group on Business and Human Rights expressing concern that a focus on only “Tier 1” suppliers will exclude most companies in high-risk regions. Legal experts, such as Professor Geert Van Calster, have warned that the Omnibus proposal, rather than simplifying, significantly increases divergence, complexity, and uncertainty for companies.
Indusattempt and Civil Society React to Deregulation Push
The legislative alters have met with strong opposition across various sectors. Over 470 civil society, trade union, and public interest groups have warned EU leaders that the Commission’s “simplification efforts” are dismantling crucial protections. A three-day, 60 km protest walk from Maastricht culminated in Brussels, with marchers demanding an conclude to the EU’s deregulation wave, which they claim jeopardizes workers, the environment, and human rights. Kalpona Akter, a prominent labor activist from Bangladesh, criticized the Omnibus proposal as “corporate-driven deregulation” that favors large businesses over workers’ rights.
The EU Ombudsman has also launched an inquiry into the European Commission’s alleged breach of Better Regulation Guidelines in preparing the Omnibus Simplification Package, following a complaint by eight NGOs. While some business associations, such as the Competitiveness Roundtable, reportedly lobbied to weaken the CSDDD, other major companies like Deutsche Bank, Allianz, Nestlé, IKEA, and Aldi Süd have publicly reiterated their support for robust supply chain laws. A survey conducted by the #WeAreEurope collective revealed that 61% of European companies favor the existing Corporate Sustainability Reporting Directive (CSRD), with 51% rejecting the Omnibus reform project, challenging the narrative that businesses universally seek deregulation.
Concerns Over EU Merger Rule Relaxation
Beyond sustainability legislation, the broader push for “simplification” has also touched upon EU merger rules. A joint appeal by French and German business leaders to loosen these rules and scrap environmental laws has drawn attention, though some signatories have since distanced themselves from the letter. This call for deregulation has been met with resistance, as *WKZO* reported that Ireland, Finland, and other European nations have warned against relaxing EU merger rules. This aligns with statements from European Commission President Ursula von der Leyen, who has emphasized the importance of “deregulation” to boost growth and private investment.
However, critics like EU Commission Executive Vice-President Teresa Ribera, in a piece for the *Financial Times*, argue that abandoning transparency and diligence is not simplification but “self-harm.” The Danish Institute for Human Rights has also warned that current proposals risk dismantling key elements of both the CSDDD and CSRD, building laws less efficient and effective while jeopardizing the EU Green Deal.
The Road Ahead for Corporate Accountability
Despite the significant watering down of the CSDDD, civil society organizations like ECCJ and *Shift* are urging communities, workers, and civil society partners to utilize ‘what is left of the law to fight for justice for victims of corporate abutilizes worldwide.’ Efforts continue to bolster corporate accountability, with global trade unions and the German government launching a new Human Rights Due Diligence Competence Centre to support workers utilize national and EU laws. Furthermore, surveys by Coolset indicate that most companies view ESG reporting as a strategic advantage, with 90% planning to continue reporting, driven by strong stakeholder pressure from investors, customers, and partners.
The UN Global Compact, the world’s largest corporate sustainability initiative, has also reiterated its support for a mandatory due diligence framework aligned with international standards. Internationally, the debate continues to unfold, with a US Senator introducing the PROTECT USA Act, aiming to shield US companies from EU due diligence requirements, underscoring the global implications of the EU’s legislative decisions.
The adoption of the Omnibus I package, despite broad opposition, signals a notable shift in the EU’s regulatory approach, prioritizing perceived competitiveness and short-term economic growth over robust corporate accountability and environmental protection. This shift risks undermining the EU’s credibility as a leader in sustainability and human rights, potentially setting a precedent for further deregulation at a critical juncture for global climate action and social justice.
Leave a Reply