EU plans to weaken corporate sustainability law

In 2024, the EU passed the Corporate Sustainability Due Diligence Directive (CSDDD) to hold companies accountable for human rights and environmental abuses in their supply chains. Set to be enforced incrementally from 2027, the passing of the CSDDD marked a major step toward eradicating modern slavery. However, the European Commission is now pushing for significant cuts to three of the bloc’s major legal frameworks, including the CSDDD, potentially allowing forced labor to persist unchecked.

Weaker rules, higher risk of modern slavery

A leaked draft of the bill obtained by POLITICO shows that the EU plans to limit corporate sustainability reporting rules to only the largest companies. This means drastically reducing the number of businesses responsible for monitoring human rights and environmental abuses in global supply chains.

One of the most concerning changes is that companies will only need to assess their direct suppliers rather than their entire supply chain. This is a major rollback that weakens protections for workers further down the chain, where forced labor is most common. The frequency of supplier checks would drop drastically, from annually to once every five years. As a result, more abuses will go undetected. Additionally, companies will no longer be required to cut ties with suppliers that fail to address violations.

Maria van der Heide, head of EU policy at the NGO ShareAction, warned:

“If confirmed, this is reckless… Sustainability laws designed to tackle the most pressing crises — climate breakdown, human rights abuses, corporate exploitation — are being crossed out behind closed doors and at record speed. This is not simplification, it’s pure deregulation.”

The Commission also plans to eliminate the EU-wide liability framework, shifting responsibility to national laws. This change would reduce businesses’ legal risks, making it harder to hold companies accountable for violations under the CSDDD. The definition of “stakeholder” would also be narrowed, limiting the number of people and communities businesses must consider in their due diligence efforts. This would exclude national human rights institutions and environmental NGOs.

Prioritizing business over human rights?

The European Commission justifies these changes as a response to economic concerns. In its 2025 work programme, it pledged to cut overlapping, unnecessary, or disproportionate regulations that allegedly burden businesses. The goal is to reduce administrative costs by 25% overall and 35% for small and medium-sized enterprises (SMEs) by 2029.

However, human rights organizations argue that this rationale does not hold up. Human Rights Watch countered by stating:

“Company lobbyists and conservative politicians argue that compliance costs and reporting obligations are too expensive and stifle businesses. But data shows that the cost of due diligence for large companies is less than 0.01% of their revenue, while between 2016 and 2023, the largest listed EU-based companies made enough profit to distribute $1.501 trillion to their shareholders.”

Take action

The proposed rollbacks have sparked backlash from human rights organizations, labor unions, and several EU lawmakers. The CSDDD was a hard-won victory in the fight against modern slavery, but these proposed changes threaten to undo its impact.

If these changes pass, businesses will face fewer consequences for turning a blind eye to forced labor, child exploitation, and human trafficking. Abuses will go unchecked, allowing companies to continue profiting from exploitation.

Learn more about why strong corporate accountability laws matter and take action by signing our petition demanding laws that put people and planet over profits.