After almost a year of political uncertainty, the European Parliament has approved the Omnibus I package, introducing changes to the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). The vote passed with a clear majority of 428 in favour, 218 against, and 17 abstentions. Next steps require formal adoption by the Council, likely in early 2026, and publication in the Official Journal.

The Omnibus I amendments substantially narrow the scope and reduce compliance expectations compared with the original directives. 

Key changes include:

• Postponement of transposition deadlinefor CSDDD to 26 July 2028. Companies will have to comply with the new measures by July 2029.
• Narrowed scope:
  • For CSRD, only companies with 1000 employees, and €450 million net turnover will have to report.
  • For CSDDD, only companies with 5,000 employees, and €1.5 billion annual turnover will be in scope.
• Climate obligations scaled back: the mandatory requirement to adopt and implement climate transition plans has been removed from CSDDD, with climate considerations remaining largely confined to reporting.
• Limited value chain mapping exercise: A general scoping exercise is expected to substitute a more comprehensive mapping exercise. Companies will be expected to base their efforts on reasonably available information, thereby limiting the extent to which information requests are passed down to smaller business partners.
  • For CSDDD, companies should not seek to obtain information from business partners “unless this is necessary”. Where a business partner has less than 5,000 employees, the company shall only seek such information only where information “cannot reasonably be obtained by other means”. Removal of EU-wide civil liability for CSDDD, potentially leading to barriers in accessing remediation.
• Reduced meaningful stakeholder engagement obligations under CSDDD:
  • Narrower definition of stakeholders: the range of entities that companies must engage with is reduced to focus on those “directly” affected by the products, services and operations of the company, its subsidiaries and its business partners.
  • Fewer required engagement stages: stakeholder engagement is now only required for certain parts of the due diligence process, namely at the identification stage, for the development of (enhanced) action plans and when designing remediation measures.
• Capping penalties: the co-legislators agreed to cap penalties at a maximum of 3% of the company’s net worldwide turnover.

Continuing focus on risk-based due diligence

Despite these roll backs, the core of the EU sustainability framework remains intact. Companies that are in scope are still expected to take a risk-based approach to human rights and environmental due diligence (HREDD), aligned with the UN Guiding Principles and OECD Guidelines. ETI welcomes the continued emphasis on prioritising salient risks and embedding due diligence as an ongoing, systematic process rather than a one-off compliance exercise.

Rollbacks that limit coverage and accountability

At the same time, the changes significantly narrow the reach and ambition of the original legislation. Raising thresholds excludes many companies and value-chain impacts from mandatory requirements and risks de-prioritisation of human rights, while the removal of climate transition plans and harmonised civil liability under CSDDD weakens accountability and limits access to remedy. Delayed implementation further postpones protections for workers and affected communities. 

The amendments also reduce the scope required for meaningful stakeholder engagement. Companies are now expected to request information from business partners only “if necessary,” and for partners with fewer than 5,000 employees, only where information “cannot reasonably be obtained by other means”  This risks indirectly restricting the ability of companies to engage proactively with workers, unions, and affected communities across their value chains, potentially reducing the effectiveness of due diligence and limiting early identification of human rights and environmental risks.

Principles for effective due diligence

ETI’s consulted position is clear that effective mandatory human rights and environmental due diligence must be grounded in international standards, apply across value chains, prioritise the most severe risks, and go beyond reporting to include prevention, mitigation and access to remedy. Meaningful engagement with workers and affected stakeholders, alongside proportionate but robust enforcement, is essential for due diligence to deliver real impact.

Expectations for responsible business

Regardless of legal thresholds, ETI expects responsible businesses to carry out systematic, risk-based due diligence on human rights and the environment, engage meaningfully with workers and other rightsholders, and take action to prevent and address harm where it occurs. Strong due diligence remains a critical part of responsible business conduct, not simply a regulatory obligation.

At ETI, we will continue advocating for legislation in line with our consulted position and working with companies, NGOs, and trade unions to ensure businesses committed to human rights are supported to address their impacts through robust due diligence, meaningful stakeholder engagement, and credible multistakeholder collaboration.

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ETI publishes consulted position in support of mHREDD

Our consulted position calls for strong, enforceable human rights and environmental due diligence (mHREDD) legislation in the UK. Grounded in international standards and developed through dialogue with trade unions, NGOs, and company members and partners, the position sets out ten principles to ensure regulation is effective, fair, and capable of driving meaningful change across global supply chains.

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