Overview

• The Stiftung Familienunternehmen commissioned former Federal Constitutional Court judge Udo di Fabio to assess the EU’s corporate sustainability regulations.
• Di Fabio’s report flags “significant legal-methodological problems” in the design of open-ended obligations covering climate neutrality, human rights and resource use.
• He criticizes that unclear compliance duties paired with sanctions amount to “Gummiparagrafen” that foster legal uncertainty and infringe on freedoms protected by the EU Charter of Fundamental Rights.
• The expert notes that indeterminacy has increased since the German Supply Chain Act was expanded into the broader EU Supply Chain Directive.
• Brussels has proposed an Omnibus simplification package to pare back requirements, but both di Fabio and the Stiftung Familienunternehmen say only a full rollback will resolve the underlying issues.