It was one of Commission President Ursula von der Leyen’s flagship points in the State of the Union address: “We need to make business in Europe easier. And the omnibuses we have put on the table so far will make a real difference: less paperwork, fewer overlaps, less complex rules.” Some experts are doubtful.
The proposed simplification of the Corporate Sustainability Due Diligence Directive (CSDDD) has long been controversial due to concerns about eroded safeguards for human rights. But now, opponents argue that the omnibus revisions will not bring meaningful simplification for large businesses, and may even create new complications.
During an expert meeting on the human rights implications of the CSDDD Omnibus, Gabrielle Holly, chief advisor on business and human rights at the Danish Institute for Human Rights, explained that when the original CSDDD was introduced in 2024, it represented a genuine paradigm shift in the way businesses go about due diligence. Companies across Europe have since been preparing for its requirements, meaning the omnibus now implies new uncertainty.
Narrowed scope of responsibility
Two points of the omnibus proposal stood out in particular to the experts. The first is that the proposal, narrows the scope companies are responsible for. Mauricio Lazala, UN business and human rights section head, underlined that the original CSDDD had aligned with the highest international due diligence standards, as articulated in the UN Guiding Principles on Business and Human Rights (UNGPs).
Under Article 8 of the omnibus proposal, however, companies would solely have to focus on their own operations and their direct business partners. Mr Lazala noted that this is not where violations usually occur. By limiting scope in this way, companies are to react only once abuses further down the supply chain have already taken place, often too late to prevent harm.
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Mr Lazala also pointed out that many countries outside the EU are in fact adopting due diligence requirements aligned with the UN Guiding Principles on Business and Human Rights (UNGPs). But as the CSDDD drifts further away from the UNGPs, there is a misalignment between the EU’s and other countries’ due diligence regimes. Investors have expressed worries about growing regulatory divergence, as countries such as Indonesia, Kenya, and Thailand move toward stricter due diligence regimes.
Fragmented liability regimes
On top of that global divergence, Gabrielle Holly explained that Article 8 conflicts with OECD guidelines. As a result, a company fully compliant with the omnibus could still face complaints under OECD procedures, a concern already voiced by companies such as Nestlé and IKEA.
Further, the original CSDDD would have harmonised liability regimes across member states. At present, standards diverge widely: the Netherlands, for instance, has far-reaching liability rules. Shell provides the case in point. In a landmark 2021 ruling, the Dutch court agreed with an environmental group and ordered Shell to cut its carbon emissions by 45 per cent by 2030, finding that the oil company had a duty to combat climate change under human rights law. That was later overruled by an appeals court.
Meanwhile, a country like Latvia has very few liability rules in place. The CSDDD would have leveled the playing field, but with the omnibus revisions, specifically Article 29, that clarity disappears. The original directive also envisaged a liability regime that allowed civil society organisations to represent victims. The omnibus removes this option, forcing victims to rely on the fragmented legal systems of 27 member states. Far from simplifying matters, experts and investors argue, this creates added complexity, since companies must navigate a patchwork of national standards.
Challenging the narrative
Ms Holly also challenged the argument that the CSDDD would harm European competitiveness, the principal argument for the omnibus proposal. On the contrary, she argued, many global businesses would prefer a clear and harmonised due-diligence regime. Without it, companies may end up applying stricter standards voluntarily, leading to a “double regime” and higher compliance costs. While the CSDDD would have required upfront investments, she stressed, in the long term it represented a sound investment in sustainable business.
All in all, the experts noted that many businesses have complained that their voices are not being heard by the Commission and that the omnibus proposal continues to be seen as rushed, undemocratic, and opaque. This echoes a formal complaint that a coalition of NGOs lodged earlier this year with the European Ombudsman.
The European Parliament is expected to adopt its final position in October 2025 regarding the Second Omnibus, after which trilogue negotiations will begin. The experts noted that in consultations with Parliament, the EPP, the driving force behind the omnibus, was notably absent. A final agreement on amendments to the CSRD is likely to arrive by the end of 2025 or early 2026.
