On March 6, 2025, Human Level hosted a practitioner-led discussion on the latest developments concerning the EU Omnibus, focused on the European Commission’s proposed amendments to the EU Corporate Sustainability Due Diligence Directive (CSDDD).
The session was open to practitioners within companies, as well as their advisors (both legal
and on soft law). It was attended by 35 participants.
The session explored what these proposed changes would mean for businesses, and how
companies can engage with the ongoing negotiations at the EU trilogue level.
This summary is intended to surface key discussion points raised by those present. It is not intended to capture a ‘consensus’ on the part of those in the room.
Key insights shared in the room were:
- Existing frameworks provide guidance: Companies have been advancing on integrating the UN Guiding Principles and OECD Guidelines into their business before hard law existed. Now we have laws that seek to legalise part of these soft law frameworks. It’s helpful for companies to consider how they can continue to meet soft law expectations, since this in turn will help them respond to the wide array of laws that companies need to navigate.
- Companies will face challenges if they restrict their due diligence efforts to what is proposed in the Omnibus text (tier 1 + areas where there is plausible information): There are a number of concerns with this approach. The following concerns were discussed:
(1) it overlooks where there are significant risks to people, and therefore to business,
(2) it will force companies into a reactive stance playing ‘Whac-A-Mole’, where companies respond to issues raised by civil society organisations, media and other key stakeholders, rather than proactively addressing the most pressing risks,
(3) it will lead to companies needing to spend greater resources on lower-risk tier one suppliers, to the detriment of due diligence further down in the value chain,
(4) it will lead to double work, with companies needing to prioritise tier 1 for the law, and then needing to prioritise further down the value chain for other reasons and other laws,
(5) it reinforces a bias toward issues where information is already available, leading to heightened scrutiny of certain commodities and supply chains while leaving others overlooked,
(6) it encourages a checkbox-style approach, which increases paperwork for businesses who are already burdened with questionnaires and audits and is neither effective nor sustainable at managing risks to people and planet. The experience of implementation of the German supply chain act (which is focused on tier one and where there is substantiated knowledge) is illustrative: companies discussed how this had led to more paperwork and burden, without leading to meaningful due diligence actions, and
(7) it is inconsistent with existing laws that do expect a value chain coverage, akin to the soft law expectations (e.g. import bans, and the EU Batteries Regulation).
- The importance of leverage beyond tier 1: There is limited leverage to address human rights issues beyond tier 1, and this is what may have motivated these suggested changes to the scope. At the same time, this limited leverage is recognised in the soft law frameworks, and this is why the expected actions beyond tier 1 focus more on building leverage – with suppliers, but also with other key stakeholders such as other buyers, governments and civil society.
- Unintended consequences of the proposed changes: There are a number of proposed provisions that seek to respond to one need, but are likely to lead to unintended consequences that are unhelpful for companies. For instance, the restriction on information that can be requested of suppliers with under 500 employees doesn’t make sense in practice and can hinder both the buyers’ and suppliers’ ability to engage together meaningfully. The proposed harmonisation could make sense in theory, but will be counter-productive if the expectations to be harmonised is based on text that is mis-aligned with expectations of companies elsewhere. The closer the text is to soft law expectations driving other expectations elsewhere, the less risky this harmonisation will be.
- The need for proactive action amid legal uncertainty: There is now a risk of businesses taking a reactive “law-only” or “wait and see” approach with these political discussions. While the law is a key driver of change, it is not the only driver to take action on human rights due diligence. Companies will do well to see beyond legal compliance to focus on taking a proactive, risk-based approach ensures long-term sustainability. It is also possible for companies to shape the discussions now. Indeed, EU policy-makers are very intent on hearing from companies. The more companies can convey that they are aligned with a pragmatic value chain-based approach, the better. The discussions are very political, and it will be particularly important for them to be nourished by practitioner perspectives within companies, since these are the professionals who have been working on these topics for years, and who understand how the legal provisions will play out in practice.
