Fears of companies getting a free pass to ignore child labour and exploitation or a much-needed boost for European businesses’ competitiveness? The decision to drastically scale back EU sustainability reporting and due diligence obligations has triggered sharp reactions across political groups and industry stakeholders.
Last week, the European Parliament has voted to drastically scale back EU sustainability reporting and due diligence obligations. And while centre-right groups hail the vote as a long-overdue correction to excessive reporting burdens, centre-left lawmakers and civil society warn of a major step backward for human rights and environmental protection.
Centre-left: “A free pass to ignore exploitation”
The Socialists & Democrats (S&D) group delivered some of the strongest criticism, arguing that the new thresholds effectively remove most companies from the scope of due diligence obligations.
MEP Kathleen Van Brempt (S&D/BE) said the centre-right had “hollowed out” the Corporate Sustainability Due Diligence Directive (CSDDD) under what she described as the false pretext of simplification.
“Some multinationals now receive a free pass to ignore child labour and exploitation,” she said. “Companies that do make an effort will be punished. That will always be unacceptable to us.”
You might be interested
Van Brempt pointed to past tragedies, from the Rana Plaza factory collapse in Bangladesh to environmental devastation in the Niger Delta, as reminders of the stakes at hand. She warned that raising thresholds to companies with more than 5,000 employees and €1.5bn turnover severely limits the directive’s reach, while the removal of routine checks on subcontractors weakens protections along global supply chains.
She also noted that several large companies had opposed watering down the directive. “Even multinationals like Nestlé, Unilever and Ferrero warned that weakening due diligence would be a mistake,” she said. “They know that clear social and environmental rules are their best protection against unfair competition.”
Centre-right majority: “A historic breakthrough for simplification”
Centre-right groups, led by the European People’s Party (EPP) and supported by the Conservatives and Reformists (ECR) and the Patriots for Europe (PfE) group, framed the vote as a political turning point.
The EPP said the outcome shows that “Europe can be both sustainable and competitive”, while ECR and PfE described it as a “historic breakthrough” enabling a shift away from what they see as the regulatory excesses of the previous parliamentary term.
According to these groups, the new majority demonstrates that voters in 2024 demanded “less regulatory pressure, more competitiveness, and a stronger focus on agriculture, industrial resilience and security”. They argue the revised thresholds and reduced administrative requirements will boost investment and protect jobs.
PfE called the vote “a major victory for workers, farmers and industry”, saying the result “proves that another majority, and another policy direction for Europe, is possible”.
Business groups: relief and calls for rapid negotiations
Major business associations welcomed Parliament’s adoption of its position, saying companies urgently need clarity and simplification.
BusinessEurope said it is “important that the European Parliament adopted its position on Omnibus I” and urged the EU institutions to move quickly. “Companies on the ground must start to see tangible progress in the simplification agenda,” the organisation said, adding that it stands ready to support the legislative process.
Eurochambres, the Association of European Chambers of Commerce and Industry, expressed similar relief. “Today’s vote on the first Omnibus package is a positive step towards simpler and more workable sustainability reporting for businesses. The European Parliament plenary must now follow up, and the EU must strive for further cuts in red tape”, the organisation’s president, Vladimír Dlouhý, said last week.
A divided Parliament heads into trilogues
The sharply diverging reactions reflect the political realignment behind Thursday’s vote. With the EPP, ECR and PfE now acting as a cohesive majority on this regulatory issue, Parliament’s centre of gravity may have shifted—creating new uncertainty over how far the final legislation will go.
EU governments will enter negotiations with their own divisions. Some capitals, such as Madrid, favour the stricter approach backed by the S&D and the Greens/EFA, while others support broader exemptions for companies. Germany and France have in fact called to scrap CSDD altogether.
Talks are set to begin on 18 November, with the goal of finalising the legislation by the end of 2025.
