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EU Council Endorses Major Rollbacks of Corporate Sustainability Due Diligence Directive

Council approval of looser supply chain checks paves the way for tense European Parliament negotiations over green rule rollbacks

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Overview

  • Under the Council’s position, the directive would apply only to companies with more than 5,000 employees or at least €1.5 billion in net turnover.
  • That change would shrink the pool of firms subject to the directive to under 1,000 compared with thousands currently required to monitor their supply chains.
  • Companies would only be required to assess direct suppliers rather than full value chains and would receive an extra year to transpose the directive into national law.
  • The shifts form part of the European Commission’s Competitiveness Compass agenda to reduce regulatory burdens and boost economic growth.
  • Environmental groups and legal experts warn that loosening due diligence checks could undermine climate transparency, erode human rights safeguards and trigger legal challenges.