The European Commission’s proposed amendments to the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) are generating controversy within the fashion industry, according to a report. A leaked draft reveals significant changes to reporting requirements, sparking debate about corporate accountability.
Key proposed changes include raising the reporting threshold for companies, adjusting value chain reporting requirements, refining due diligence obligations, postponing sector-specific standards, and maintaining double materiality and limited assurance. Specifically, the net turnover threshold for reporting would increase, potentially exempting many US and non-EU companies. Value chain reporting would be limited to direct business partners, and due diligence would focus on direct suppliers unless plausible risks are identified further down the supply chain. Sector-specific standards for industries like fashion would be indefinitely postponed.
These proposed changes have drawn criticism from environmental and human rights advocates, who argue they weaken corporate accountability. They fear reduced transparency in supply chains and a shift from regulation to voluntary commitments. EU member states with strong sustainability policies also express concern that these changes may hinder progress toward climate and human rights goals. Fashion brands and industry stakeholders have mixed reactions, with larger brands potentially concerned about accusations of greenwashing and smaller companies welcoming the reduced reporting burden.
The changes could significantly impact fashion’s sustainability efforts, potentially leading to less supply chain transparency, a greater reliance on voluntary initiatives, longer compliance timelines, and potential competitive disadvantages for companies that have already invested heavily in sustainability reporting.
While the final form of the amendments is uncertain, the fashion industry must remain engaged. Experts emphasize that regardless of regulatory changes, aligning due diligence with established frameworks like the UN Guiding Principles and OECD Guidelines remains crucial. The debate about balancing simplification and strong sustainability standards will likely continue.
