At the end of June 2025, EU member states agreed on changes to the directive. In future, the regulations will apply only to very large companies—those with at least 5,000 employees and an annual turnover of €1.5 billion. Previously, the threshold was 1,000 employees and €450 million in turnover.
In addition, companies will no longer be required to oversee their entire supply chain, but only their direct business partners. This means less scrutiny of subcontractors from other countries, such as raw material suppliers or other third-party providers.
The European Commission also aims to simplify corporate obligations regarding sustainability. The proposal presented at the end of June includes two key legal acts:
The Corporate Sustainability Reporting Directive (CSRD), which requires companies to publish sustainability reports, and
The Corporate Sustainability Due Diligence Directive (CS3D or CSDDD), which governs human rights and environmental responsibilities in global supply chains.
The aim is to reduce reporting requirements and ease the burden on smaller businesses.
“We have kept our promise to simplify EU rules. We are taking a decisive step towards our common goal of creating a more favourable business environment to help our companies grow, innovate, and create high-quality jobs,” said Adam Szłapka, Poland’s Minister for European Union Affairs.
Criticism from organisations
Many organisations have criticised the planned changes, warning that human rights violations and environmental abuses may go undisclosed. In particular, child labour and forced labour could persist in remote parts of the supply chain, without European companies being held accountable.
The German initiative Lieferkettengesetz called the proposals a “huge step backwards” and urged the European Parliament to reject them during the next phase—known as the trilogue—and push for stronger regulations. WWF Germany also expressed strong opposition.
According to critics, the proposal to weaken both the CSRD and the CSDDD contradicts the original objectives of these regulations and risks reducing them to little more than symbolic gestures.
Economy or responsibility?
Supporters of the relaxed rules argue that European companies should not be put at a competitive disadvantage globally. However, critics warn that reduced oversight may lead to a loss of control and transparency in international supply chains.
Negotiations on the final version of the directive are expected to begin during the trilogue between the European Parliament, the Commission, and the Member States—most likely in autumn 2025.
