EU: Council agrees position of revised due diligence law...

EU states agree to narrow due diligence law to larger firms. Parliament debates scope. Unions object, fearing weaker worker protections. Final law expected post-summer

The key points: EU Member States have agreed to narrow the corporate sustainability due diligence directive to cover only companies with 5,000 employees and €1.5 billion turnover, a significant increase from previous thresholds. The European Parliament is still debating its position, and unions are pushing back, warning of weaker worker protections. The law’s final shape will be settled after further negotiations.

Why this matters: The revised scope will reduce the compliance burden on many companies but may dilute protections for workers and reduce pressure on supply chains. The debate reflects broader tensions between regulatory ambition and practical implementation.

What might happen next: Negotiations between the Council and Parliament will continue, with the final law expected after the summer break. Unions and business groups will keep lobbying for their preferred outcomes. The eventual compromise will set the bar for corporate due diligence across Europe.

What you should be doing: Review your company’s current due diligence processes and assess whether you are likely to be in or out of scope under the new thresholds. Stay updated on negotiations and be ready to adapt compliance programmes once the final law is agreed.

ADDITIONAL INFORMATION:

Unions have reacted angrily, read what they have to say here.