Trade Bodies Press European Commission to Uphold CSRD and CSDDD Regulations

The European Commission is set to unveil an ‘Omnibus’ package later this month, detailing plans to streamline the EU’s green finance taxonomy. This framework dictates which investments qualify as ‘sustainable’. Alongside these revisions, the package will propose simplifications to two key corporate reporting mandates: the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). However, mounting pressure from businesses and trade bodies has jeopardised these regulations' scope, timeline, and mandatory compliance measures.

Amid growing concerns from businesses over regulatory burdens, the EU is considering delaying key elements of the CSRD and CSDDD—or even scaling back certain mandatory disclosures entirely. The most contentious issue? The potential removal of double materiality reporting is a fundamental aspect of the CSRD that requires companies to disclose both how sustainability issues impact their business and how their business impacts the environment and society. Additionally, the number of companies obligated to comply could be significantly reduced under the proposed revisions.

The letter to the CSDDD reads: ”When it committed to this groundbreaking legislation, the EU positioned itself as a world leader. It demonstrated that it was committed to shifting the global economy toward a model that prioritised shared prosperity and respect for human rights and the environment.

“Even before it came into force, many of us have been able to leverage the CSDDD to engage with businesses in our countries, leading to better practices on the ground. Others use it as a model to follow when we advocate for better protections for workers and the environment in our own countries.

“If the EU delays or casts doubts on the CSDDD, its potential to incentivise changes in business practices and to serve as a standard for other jurisdictions will be lost, to the detriment of people and the planet.”

The letter argues that voluntary initiatives have “failed to end business practices that harm people and the environment, particularly in our countries”.

The letter argues that voluntary initiatives have “failed to end business practices that harm people and the environment, particularly in our countries”.

The statement concludes: “Contrary to the message spread by some corporations, delaying or watering down the CSDDD will not enhance economic growth or international trade. On the contrary, it will only perpetuate a status quo in which companies are incentivised to turn a blind eye on the harms caused by their operations and value chains.”

France and Germany strongly support this push for regulatory relaxation. Their governments have advocated for a broad deregulation approach to ease compliance burdens on large corporations. Meanwhile, Spain and Denmark call for a more targeted adjustment, opposing a wholesale reopening of the Directives while supporting limited extensions to reporting deadlines.

The negotiation process has triggered intense criticism from more than 70 civil society organisations across the Global South, who claim they were shut out of key discussions earlier this month. These groups—spanning South America, Africa, and Asia—argue that trade bodies and businesses that initially opposed the sustainability regulations have dominated the current revision process and are now pushing for extensive rollbacks or delays.

Critics have labelled the process “opaque and hurried,” warning that any dilution of the regulations could undermine corporate accountability for human rights violations, labour abuses, and environmental harm—issues deeply tied to global supply chains. Anti-Slavery International, the world’s oldest human rights organisation, has spearheaded a letter urging the EU not to delay implementation or weaken mandatory disclosures.

The European Commission is expected to formally present its stance on the Omnibus package in the last week of February. However, any reforms will require the backing of EU member states representing at least 65% of the bloc’s population.

At stake is corporate reporting and the EU’s broader approach to sustainability and corporate accountability. With France, Germany, Italy, and Poland pushing for sweeping deregulation and Spain and Denmark advocating for a balanced approach, the coming weeks will determine whether the EU reaffirms its leadership in sustainable finance—or bows to corporate pressure.

It sent a letter to the Commission stating, "Removing certain existing obligations would not necessarily improve our competitiveness and yet risks sending a dangerous signal of backtracking on our core European values.”

The Omnibus package is just the beginning. Reports indicate that the European Commission is preparing at least four more deregulation packages in 2025 in response to pressure from national governments and industry lobbies. The shift follows last year’s adoption of the ‘Budapest Declaration on Competitiveness and the ‘Competitive Compass’, which call for significant reductions in reporting requirements by mid-2025.