This week, Human Rights Watch joined 170 other human rights and environmental organizations and trade unions calling on the European Commission and its President Ursula von der Leyen to actively protect the European Union’s existing corporate accountability laws.
The statement was made in response to President von der Leyen’s announcement on November 8, 2024, that in order to improve EU competitiveness, she would reduce reporting requirements for companies by 25% and introduce an “omnibus” proposal that could weaken the Corporate Sustainability Due Diligence Directive (CSDDD) and two other corporate sustainability reporting and classification laws adopted during her first mandate at the helm of the commission. The CSDDD is the EU’s corporate accountability law requiring large corporations to conduct human rights and environmental due diligence in their global supply chains.
Civil society organizations have warned that the omnibus bill could act as a trojan horse for political groups opposed to the law to remove important climate and human rights provisions from the CSDDD once back in parliament.
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.
The EU should look to create a human rights economy, where it would be responsible for prioritizing the long-term greater interest of people and the planet through equitable distribution of resources and environmental sustainability over maximization of profits for the benefit of a few.
Therefore, instead of revisiting these essential laws, the European Commission and member states should work to integrate them into national law and enforce them. The EU should encourage a race to the top to protect human rights, the environment, and climate, all while providing companies with a level playing field through clear expectations, legal certainty, and timely and comprehensive guidelines on implementation.
The EU has been a global leader in developing legislation to hold companies accountable for human rights and environmental abuses; now is not the time to step back.