The Danish Institute for Human Rights published Reaction to the European Commission’s “Omnibus 1” Proposal (February 2025) describing its concerns with the European Commission’s Omnibus Simplification Proposal.
Human Level’s Take:
- The proposed changes to the EU CSDDD and CSRD couldn’t come at a worse time: the urgency of addressing human rights and environmental risks and impacts is higher than ever. And yet, the proposed changes send a signal that we have time for bureaucratic processes that yield no positive impact.
- The proposed changes have now made the EU CSDDD “hollow” in the words of the Danish Institute for Human Rights. The fundamental departure from the risk-based approach to due diligence leaves companies with significant blind spots and shifts the burden of identifying impacts over to the media and NGOs who will now be tasked with bringing ‘plausible information’ to a company’s knowledge. The limits to who needs to be engaged with and when risks undermining the effectiveness of the company’s due diligence. And the removal of the EU-level civil liability regime reduces legal certainty for companies - while restricting access to justice.
- The proposed changes to the CSRD carry “significant setbacks for human rights.” The significant reduction of companies in scope leaves companies out that have already been reporting for years - hindering in turn investors’ ability to access meaningful information. The limit on what companies can request of their business partners will hinder access to critical information that companies need. And the proposed fast track revision of the ESRS to prioritise quantitative datapoints risks removing the very information that is meaningful to report on.
- The proposed changes are flawed, and the process followed was flawed. Next steps: Member States and the European Parliament must uphold the directives’ original goals, and ensure they remain aligned with international standards on responsible business conduct.
Some key takeaways:
- Bad for human rights, bad for the environment, bad for business: The Danish Institute for Human Rights describes the challenges with the proposed changes. The “proposed changes undermine the ability of the instruments to meaningfully address the challenges of environmental degradation, climate change and respect for human rights, creating instead a regime of bureaucratic burdens with little positive impact.” The timing isn’t right for prolonged uncertainty since there is urgency in moving forward on environmental and human rights due diligence. “This proposal by the European Commission sends a worrying signal to the business community that human rights and the environment are no longer priorities requiring urgent action at a time where the exact opposite message is needed.”
- A hollow CSDDD: The Danish Institute for Human Rights describes three key issues with the proposed changes to the CSDDD. First, there is a fundamental departure from the risk-based approach to due diligence. The proposed approach moves away from a flexible, risk-based approach that helps companies tackle the most serious impacts, not “what is within their immediate line of sight.” Instead of simplifying things, it adds more complexity, and is inconsistent with what companies have been doing to date. This approach shifts the responsibility for identifying impacts onto third parties—like the media, NGOs, and other stakeholders—who become sources of “plausible information.” It’s not just a step back from the CSDDD but a rollback of over a decade to the pre-UNGP era. This is made worse by the directive’s reliance on ineffective approaches, such as reliance on contractual codes of conduct, certifications and assurances. Second, the proposed changes restrict who companies need to engage with, and when, which “creates risks of cosmetic compliance and the design and implementation of appropriate measures which are out of step with the needs and views of stakeholders.” Third, the proposed changes leaves liability to national law which allows a fragmented litigation landscape to endure, does not meaningfully address access to justice challenges, and removes certainty for business - amongst other issues.
- A diluted CSRD: The Danish Institute for Human Rights describes three key issues with the proposed changes to the CSRD. First, the proposed thresholds exclude 80% of the previously covered companies from reporting, including companies that have already been reporting for ten years under the 2014 Non-financial Reporting Directive (NFRD). This widens the gap between investors, civil society and affected stakeholders’ information needs and the sustainability information provided by companies. However, investors needs this information in order to factor sustainability into their decision-making. Second, the ‘extended and strengthened value chain cap’ which would limit what information companies can request from business partners not required to report is problematic. This value chain cap would be based on the Voluntary Standard for Small and Medium Sized Companies (VSME) developed by EFRAG which was designed for a different purpose and narrows social sustainability to a few workforce metrics. It’s not a suitable basis for information requests and contradicts international standards on responsible business conduct. Third, the proposal calls for fast-tracking changes to the first set of European Sustainability Reporting Standards (ESRS) to give priority to quantitative datapoints over qualitative text, whereas qualitative reporting is key in this area. The omnibus suggests moving away from sector-specific reporting standards. Rather, “sector specific guidance should be given priority and, if necessary, be in the form of voluntary guidance rather than mandatory standards.”
- A flawed process: The Omnibus proposal rewrites laws that were already political compromises, with the CSRD already implemented in many Member States and the CSDDD not yet in force. The Commission has given no strong justification for these changes, which were rushed through without proper consultation or impact assessment. This move undermines international standards, the EU’s own commitments, and established business practices on responsible conduct. In short: the “Danish Institute for Human Rights call on Member States and the European Parliament to preserve the original ambition and objectives of these Directives and work for compromises that safeguard the Directives’ alignment with international standards on responsible business conduct.”
