Lara Wolters, Member of the European Parliament (S&D, NL) and former rapporteur on corporate sustainability due diligence directive provided a keynote speech at the Frank Bold conference: Frankly Speaking on Sustainability and Competitiveness that took place on 30th January.
Human Level’s Take:
- Lara Wolters, who everyone knows as a critical player in driving forward the EU CSDDD at the European Parliament level, provides a strong, thoughtful and ‘saying it how it is’ keynote speech on the Omnibus approach.
- She expresses deep concerns about the current direction of policy changes and criticises the Omnibus process being followed by the European Commission. She makes clear that short-term politics and political opportunism has taken over. The short paragraph in the Draghi report related to competitiveness is being taken out of proportion by conservative politicians who have always disliked any form of sustainability regulation. She makes clear that perceived short-term business freedom comes at the cost of long-term sustainability and that Europe’s sustainability is not a weakness but a competitive strength.
- Lara acknowledges that implementing sustainability laws will be challenging. It will require effort from policymakers, businesses, and auditors and it will entail adjustments based on lessons learned over time. However, rolling back legislation before it has even been implemented is irrational. It creates uncertainty for companies. It sends mixed signals to businesses that have already invested in compliance. It rewards companies that delayed sustainability efforts while punishing those who took early action. Lara warns that policy flip-flopping damages business confidence and economic stability.
- She reaffirms the economic logic of sustainability, and argues that sustainability is a market reality, driven by consumer demand, investor expectations and global competitiveness. EU policymakers have spent years balancing legal certainty with business flexibility in the CSRD and CS3D. The European Commission must be criticised for its rushed approach to changing the rules with minimal consultation. This reckless deregulation would harm businesses rather than help them.
- Lara states that there is still time to turn things around and make sure the Omnibus process delivers real benefits for businesses and upholds Europe’s climate and social goals. She urges policymakers to stay true to sustainability laws and resist politically driven rollbacks. She calls for responsible decision-making. The European Commission now faces a choice: lead in sustainability and responsible business or cave to short-term populist pressures. It must collaborate with businesses, policymakers, and experts to refine—not dismantle—regulations.The world is watching, and the decisions made today will shape Europe’s economic, environmental and social future.
Key points from Lara’s speech:
- Deep concerns about the current direction of policy changes: Lara expresses disappointment and concern about the current approach being pursued on the Omnibus, calling it “not good enough for Europe.” She acknowledges that simplification of regulations is a valid concern, and that some overlapping laws could be streamlined. However, the Draghi report itself does not claim that deregulation is the main solution to economic problems. There are exaggerated claims that companies are fleeing Europe due to sustainability reporting. The short paragraph in the Draghi report related to competitiveness is being taken out of proportion by conservative politicians who have always disliked any form of sustainability regulation.
- Criticism of the Omnibus process: Lara warns that those participating in the Omnibus process now are those that have always been opposed to sustainability laws. They are politicians with histories of climate denial and weakening workers' rights. They are businesses with poor human rights and environmental records. There is a lack of transparency in the EU’s consultation process happening right now – with a number of energy companies being invited, and hardly any sustainability experts. In essence, this process is political opportunism, with some politicians seeing an opportunity to push deregulation now that a new parliamentary majority is possible. This has become more about avoiding standards and accountability, rather than responding to the economic crisis.
- The role of France and Germany in policy reversals: Lara describes a “panic button” reaction from politicians in France and Germany. For instance, France was initially a leader in due diligence laws, with its own due diligence law, and a strong supporter of both the CSRD and CS3D. However, during the CS3D negotiations, France frequently changed its stance and added new demands. Now, France is pushing for significant deregulation efforts in the Omnibus process.
- Defending Europe’s social and environmental model: There will be consequences of deregulating the way the U.S. is proceeding under Trump. Perceived short-term business freedom comes at the cost of long-term sustainability. As an analogy, removing speed limits may allow cars to go faster, but it also increases accidents and pollution. Similarly, deregulation may temporarily boost business, but it has long-term social and environmental costs. Europe’s sustainability is not a weakness but a competitive strength. Europe has high environmental standards, strong social protections, and a goal of becoming the first climate-neutral continent. Businesses now need stability and certainty so that they can can make long-term strategic decisions.
- Defending the CSRD and CS3D against premature rollbacks: Lara acknowledges that implementing sustainability laws will be challenging. It will require effort from policymakers, businesses, and auditors and it will entail adjustments based on lessons learned over time. However, rolling back legislation before it has even been implemented is irrational. It creates uncertainty for companies. It sends mixed signals to businesses that have already invested in compliance. It rewards companies that delayed sustainability efforts while punishing those who took early action. Lara warns that policy flip-flopping damages business confidence and economic stability.
- Reaffirming the economic logic of sustainability: It is a misconception that EU sustainability laws represent unreasonable burdens. She argues that sustainability is a market reality, driven by consumer demand, investor expectations and global competitiveness. Businesses themselves have recognized that climate change is a major risk, and most emissions come from private sector activities—so businesses must play their part. Human rights concerns also impact business: a supply chain scandal can cause reputational damage and financial losses.
- The importance of a stable legal framework: EU policymakers have spent years balancing legal certainty with business flexibility in the CSRD and CS3D. The European Commission must be criticised for its rushed approach to changing the rules with minimal consultation. There are other global jurisdictions that are adopting similar sustainability standards, and the CS3D makes the EU a global standard-setter. It helps ensure that EU companies cannot be undercut by competitors with weaker rules and provides a level playing field within the EU single market. It already includes safeguards for SMEs, ensuring that they are not disproportionately burdened.
- Concerns about the European Commission’s future actions: The European Commission may deliberately misinterpret the Draghi report. We are seeing a populist shift—an attempt to “out-Trump Trump” by aggressively cutting regulations in a way that mimics U.S. deregulation policies. This move would require the support of the extreme right in the European Parliament, raising concerns about the political direction of EU policymaking and the potential erosion of sustainability standards due to pressure from far-right factions.
- Damage to businesses and the EU’s reputation: This reckless deregulation would harm businesses rather than help them. Instead of providing certainty and stability, it would create more confusion. Companies that have already invested in compliance would be left at a disadvantage. The EU risks falling behind in global sustainability leadership at a time when other economies are strengthening their own regulations. Europe’s global reputation is at stake. Many businesses themselves see the value in clear and stable regulations, rather than a chaotic deregulation process driven by political opportunism.
- Final call for a balanced and thoughtful approach: Lara states that there is still time to turn things around and make sure the Omnibus process delivers real benefits for businesses and upholds Europe’s climate and social goals. She urges policymakers to stay true to the original aims of sustainability laws and resist politically motivated rollbacks. She warns against being swayed by Trump-style deregulation and calls for serious, responsible decision-making. The European Commission must now decide: Will it continue leading the world in sustainability, responsible business, and climate action? Or will it cave to short-term populist pressures and dismantle years of progress? Lara calls on the Commission to resist the temptation of extreme-right alliances and instead work with businesses, policymakers, and experts to refine and improve regulations where necessary. We need to ensure that simplification does not turn into deregulation, and that the EU maintains its commitment to a sustainable and socially responsible economic model. The world is watching how the EU will act. The decisions made today will shape Europe’s economic, environmental and social future. Now is the time for the European Commission to work with businesses, policymakers, and experts to support businesses and maintain the EU’s leadership in sustainability and global standards.
