Due Diligence: Controversy over new law continues

EU due diligence laws face pushback from France and Germany, NGOs protest, and sustainability consultants fear for their business as legislative priorities shift toward competitiveness

The key points: The future of EU due diligence laws is highly contested, with France and Germany seeking further cutbacks so that CSRD and CSDDD rules apply only to the largest companies. France wants the threshold set at 5,000 employees, arguing smaller firms lack global influence. NGOs have filed a complaint with the European Ombudsman, alleging insufficient consultation and lack of environmental and social impact assessments. The EU Parliament has criticised the rollback, warning it threatens jobs and businesses in the sustainability sector.

Why this matters: This debate signals a shift in EU priorities from ambitious sustainability regulation toward competitiveness and economic pragmatism. The outcome could reshape the compliance landscape for large companies and alter the business models of consultants and service providers in the sustainability field.

What might happen next: Recommendations from the Ombudsman are non-binding and unlikely to change the political direction. The Commission and national governments are expected to continue focusing on competitiveness, but the Parliament’s opposition may slow or modify the rollback.

What you should be doing: Monitor developments closely, especially if your business relies on sustainability reporting or consulting. Prepare for possible changes in compliance obligations and consider how your business model might adapt if the scope of due diligence laws is narrowed.