What's Happening?
The European Commission's Omnibus I proposal, approved by the European Parliament's Committee on Legal Affairs, weakens corporate obligations under the Corporate Sustainability Due Diligence Directive
(CSDDD). The changes raise the threshold for companies to comply with the directive, exempting many small and medium-sized enterprises. Human rights organizations have criticized the move, arguing it undermines efforts to hold companies accountable for human rights and environmental impacts. The proposal is part of a broader effort to simplify European sustainability legislation.
Why It's Important?
The weakening of the due diligence law has significant implications for corporate accountability and sustainability efforts. By exempting smaller companies and reducing the scope of compliance, the changes could lead to a decrease in corporate responsibility for human rights and environmental issues. This decision may impact industries such as fashion, where supply chain transparency and ethical practices are critical. The backlash from human rights organizations highlights the tension between regulatory simplification and the need for robust corporate governance standards.
What's Next?
The European Parliament will hold a plenary vote on the proposal later this month. If approved, trilogue negotiations will follow, involving the Parliament, the Council, and the Commission. The final text will determine the extent of the directive's impact on corporate practices. Stakeholders in the fashion industry and other sectors will be closely monitoring the developments, as the outcome could influence future sustainability policies and corporate responsibility frameworks.
