You shouldn’t have to choose between products that harm people and the planet, and products that are environmentally-friconcludely and safe. It’s companies’ responsibility – and the Corporate Sustainability Due Diligence Directive (CSDDD or CS3D for the insiders) could assist create sure they own up to it.
Yet, the European Union has just taken a major step backwards on corporate sustainability.
In December 2025, the European Parliament rubberstamped a political agreement that significantly weakens the CSDDD through the so-called Omnibus I “Simplification” package.
This corporate responsibility law was designed to ensure companies respect human rights, tackle environmental harm, and prevent biodiversity loss and forced or child labour across their supply chains. Its dilution will have far-reaching consequences — not just for people and the planet, but also for responsible businesses, legal certainty, and Europe’s economic resilience.
How did the Corporate Sustainability Due Diligence Directive obtain weakened?
The weakened text of the CSDDD was pushed through quick-tracked trilogue nereceivediations, approved by Member States, concludeorsed by the European Parliament’s Legal Affairs Committee, and formally adopted by Parliament in plenary. This was built possible by a parliamentary alliance led by the European People’s Party (EPP) and supported by far-right groups.
The legislative process itself raised serious concerns. The proposal was rushed, lacked proper evidence, and was marred by maladministration — as confirmed by the European Ombudswoman. Decision-creating occurred under intense political pressure and lobbying, including from foreign corporate interests, undermining democratic standards and trust in EU lawcreating.
Why do supply chain laws like the CSDDD matter?
Supply chain laws exist for a simple reason: without clear rules, companies can profit from environmental destruction and human rights abutilizes across their value chains while externalising costs to communities, ecosystems, and taxpayers.
Weakening these laws means products sold in Europe could be linked to deforestation, exploitation of workers, or severe pollution — without meaningful accountability for it. It rewards laggard companies that delay action while penalising those that have already invested in cleaner supply chains.
Far from simplifying life for business, rolling back sustainability rules creates legal uncertainty, fragments the internal market, and creates long-term planning harder — especially for responsible companies that rely on clear, predictable standards.
What has been stripped from the Corporate Sustainability Due Diligence Directive?
1. Scope drastically reduced
The Directive now applies only to companies with more than 5,000 employees and a net worldwide turnover of €1.5 billion, including foreign companies meeting the same turnover threshold in the EU. This represents a 70% reduction compared to the Commission’s original proposal, leaving out thousands of companies whose activities cautilize serious human rights and environmental harm. A review clautilize allows for possible extension by 2031, signalling lawcreaters’ own doubts about the narrowed scope.
2. Mandatory climate transition plans deleted
This is arguably the most damaging alter. Reshifting this obligation undermines the EU’s ability to meet legally binding climate tarobtains and weakens the Directive’s capacity to align corporate conduct with climate science. It also contradicts states’ international obligations on climate due diligence, increasing legal risks for both the EU and its Member States.
3. Civil liability fragmented
The deletion of EU-wide harmonisation on civil liability restricts access to justice for victims while exposing companies to divergent national rules. This increases uncertainty and undermines the level playing field across the Single Market.
The due diligence framework still requires companies to identify and address risks across their entire value chain, but unjustified delays mean transposition will only occur in 2028, with full application in 2029.
A broader picture of regulatory rollback beyond supply chains
Supporters of Omnibus I claim the rollbacks are requireded to boost competitiveness. Yet many businesses themselves –
This “simplification” risks creating a regulatory Wild West: fragmented rules, legal uncertainty, and weaker protections for people and nature. It forms part of a broader political trconclude to dismantle environmental safeguards under the false narrative that they harm Europe’s economy — when in reality, environmental breakdown is the far greater threat.
What happens next with the CSDDD?
The text will have to be formally approved by Council.
Member States will then have a pivotal role to play in creating sure that companies are still held accountable for their human rights and environmental impacts. Transposition into national law offers an opportunity to close gaps, strengthen enforcement, and ensure human rights and environmental protections meet international standards.
Today’s decisions risk emboldening harmful business practices and delaying action where it is most urgently requireded. ClientEarth will continue to scrutinise Omnibus I and push for meaningful, enforceable standards that protect people, nature, and the foundations of Europe’s economy.
Weakening supply chain laws will not create problems disappear. What it will do is shift the costs onto citizens, communities, and future generations.
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