The European Union has reached a provisional agreement that significantly relaxes key aspects of its supply-chain laws, in a move widely seen as favouring business interests over stricter corporate accountability and sustainability obligations.
Under the new deal, reporting and due-diligence rules under the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) will be scaled back. Only very large firms — those with more than 5,000 employees and over US $ 1.75 billion in net turnover — will be required to comply with the due-diligence law.
The changes also raise the threshold for CSRD reporting obligations: only companies with more than US $ 500 million in net turnover will now be subject to sustainability reporting.
In a statement accompanying the agreement, trade ministers described the outcome as a key step toward boosting business competitiveness across Europe, saying the adjustments will help companies grow, innovate and create high-quality jobs.
Critics, including human-rights organisations and environmental advocates, have decried the agreement as a major setback for corporate accountability. They warn that the watered-down legislation will dramatically reduce protections for workers and the environment — especially in global supply chains where abuses could go unchecked.
The provisional agreement still needs formal endorsement by the Council and the European Parliament. If approved, the revised rules are expected to take effect from mid-2029.
