The European Parliament's approval on December 16, 2025, of final amendments watering down the European Union's flagship corporate accountability law severely undermines the EU's ability to hold businesses accountable for human rights and environmental harms, Human Rights Watch said today.
The vote on the Corporate Sustainability Due Diligence Directive draws to a close eight months of intense industry lobbying, a nontransparent policy process, and chaotic negotiations. The changes reduce the number of companies covered by the law and delete companies' obligation to implement climate transition plans.
"All that is left of the EU's trailblazing corporate accountability law is a skeleton," said Helene de Rengervé, senior corporate accountability advocate at Human Rights Watch. "The final text means corporate interests are being prioritized over the rights of workers, communities, and environmental protection."
The original corporate accountability law, adopted in 2024 and due to become binding on businesses in 2026, required large companies with more than 1,000 employees located or operating in the EU to tackle human rights and environmental harm throughout their global supply chains.
European institutions have now agreed, however, to delay the requirement for EU member states to transpose the directive into national law to July 2028, with the law now only becoming binding on companies in July 2029.
The revised law was adopted after a flawed and untransparent policy process, Human Rights Watch said. The process began on November 8, 2024, when EU Commission President Ursula von der Leyen announced a fleet of so-called Omnibus laws to simplify the European Green Deal. The proposed changes, made public only in February 2025, weakened key provisions of the corporate accountability law, making it harder for victims of rights abuses to sue companies.
Lobbying by European and US companies, especially the fossil fuel industry, heavily influenced the Commission's proposals. US companies also successfully lobbied President Donald Trump for his administration to seek to have the law watered down as part of trade negotiations with the EU.
Civil society was largely excluded from the process. The EU Ombudswoman found that the EU Commission provided insufficient justification for invoking a need for urgency and for introducing the changes without ensuring the transparent, evidence-based, and inclusive preparation of legislative proposals. This violated the Commission's own principles of good law and amounted to maladministration. What has happened has put the EU's credibility at risk, Human Rights Watch said.
Human Rights Watch and 170 other civil society organizations, as well as dozens of businesses and investors, opposed the changes in the Omnibus law. European governments and the European Parliament, however, ultimately adopted many of the amendments, with centrist political parties voting in the parliament with far-right parties to approve them.
The amended law does preserve some important requirements, including the core obligation for companies to set up meaningful human rights and environmental due diligence processes over their entire supply chain. An earlier proposal to limit the scope of the due diligence only to direct suppliers was ultimately rejected.
Companies will also still have to implement a risk-based approach, prioritizing intervention in the most severe cases first, while being obliged to address all existing or potential abuses uncovered in their supply chain.
Companies will no longer be required, however, to implement climate transition plans to monitor and ultimately reduce their greenhouse gas emissions in line with the landmark Paris Climate Agreement, which EU countries ratified. Companies covered by the law, even with its reduced scope, are responsible for the equivalent of almost two-thirds of the EU's total annual emissions of carbon dioxide (CO2), based on a recent study.
Overall, the changes have reduced the number of EU corporate groups covered by the law by 70 percent, from 3,363 to 980. The changes also deleted a requirement for member states to develop a uniform system for holding companies accountable in EU courts for human rights abuses, complicating victims' access to justice.
"The amended law is far from the groundbreaking corporate accountability law that it set out to be," de Rengervé said. "But communities, workers, and civil society partners should still use what is left of the law to fight for justice for victims of corporate abuses worldwide."
