'A blow to the EU’s human rights leadership': CSRD Omnibus faces major backlash from campaigners

European companies have long cried out for a simpler framework for sustainability reporting, and the EU has now presented its answer: a new Omnibus that eliminates CSRD requirements completely for a majority of companies.

The proposal also waters down the requirements for the corporate sustainability due diligence directive (CSDDD), which is meant to hold companies accountable for human rights violations in their supply chains.

"Simplification promised, simplification delivered,” boasted European Commission President Ursula von der Leyen, who had promised in December to cut the red tape that companies face.

And while some business organisations celebrated the new rules, there were plenty of negative reactions from both sustainability and human rights groups.

The main concern centred around the looser requirements for keeping supply-chain companies in check.

“If adopted, today’s package will prove to be a huge step back for the rights of individuals and communities bearing the burden of corporate impunity worldwide – and a blow to the EU’s human rights leadership and stability at a time when it is most needed,” the International Federation for Human Rights writes on its website.

That sentiment was echoed by Lara Wolters, a Dutch member of the European Parliament.

“The European Commission has today pushed through proposals which would allow companies to ignore the vast majority of problems in their supply chains, and deleted the consequences for corporate negligence,” Wolters writes on LinkedIn.

Amandine Van den Berghe, a lawyer for environmental organisation ClientEarth, also didn’t mince words.

“The Commission has decided to tear down three key pillars of the Green Deal that ensure businesses act responsibly throughout their value chain – a reckless move that could actually not only hinder the EU's environmental goals but also the competitiveness of the EU market,” Van den Berghe writes.

The new rules would mean that only companies with at least 1,000 employees or revenues of €50 million would be required to comply with CSRD reporting, although with a much simplified report card that eliminates about 70 percent of the data points.

Smaller businesses – including those in the supply chain of a company who falls under the CSRD scope – can still do voluntary reporting.

CSDDD requirements are also watered down and with deadlines pushed back until 2028, which left some human rights campaigners exasperated.

“Changes to the CSDDD under the Omnibus undermine years of hard work we've invested in advancing corporate accountability on human rights, environment and climate action, Beate Beller, a campaigner at Global Witness, writes on LinkedIn. “The European Commission's proposed changes to the law jeopardise these advances and raise serious concerns about the integrity of European policy-making.”

There were more positive reactions from the business community, which has long argued that it was being buried under a slew of paperwork related to sustainability reporting.

"European companies have ended up being flooded by a tsunami of regulations and administrative burdens that threaten their competitiveness in a time of geopolitical unrest,” says Brian Mikkelsen, CEO of the Danish Chamber of Commerce. “Therefore, it is very pleasing that the EU will now give companies a helping hand.”