What to know about the European Commission's changes to the ‘due diligence law’
The European Parliament's Committee on Legal Affairs (JURI) has approved the European Commission's Omnibus I proposal. This move weakens corporate obligations under the Corporate Sustainability Due Diligence Directive (CSDDD), also known as the ‘due diligence law’.
The CSDDD, as adopted in 2024, would enforce corporate social responsibility for large companies operating in the EU market, including those in the fashion industry. These companies would be held responsible for the negative human rights and environmental impacts of their operations, as well as those of their subsidiaries and business partners. Failure to address abuses in their supply chain could result in fines of up to 5 percent of their global annual turnover. Victims, such as a textile worker in a factory, could also bring civil lawsuits against them. These provisions are weakened by the new proposal.
The most significant change from the JURI decision is that many small and medium-sized enterprises now fall outside the directive's scope. The threshold is now set at 5,000 employees, previously 1,000, and an annual turnover of 1.5 billion euros, up from 450 million euros. Smaller companies are therefore exempt from these obligations. Additionally, companies that remain under the directive will no longer need to assess the risk of abuses throughout their entire supply chain. They will only need to do so for direct suppliers. For the fashion industry, this means compliance with the CSDDD becomes a voluntary suggestion. Social sustainability policies, in particular, may fall down the list of priorities.
Angry reactions
Human rights organisations have reacted with outrage, particularly given the long journey to establish the due diligence law. Fairtrade International called the decision a missed opportunity for the European Parliament to take an ambitious stance on corporate responsibility on LinkedIn. The organisation stated: “Fairtrade is deeply concerned that while countries worldwide are tightening due diligence requirements, the EU is moving in the opposite direction.”
The Clean Clothes Campaign also reacted strongly. In a press release, the organisation quoted its lobby and advocacy coordinator, Giuseppe Cioffo, from Brussels: “Today, MEPs have betrayed garment workers worldwide. What could have been a breakthrough for workers living on poverty wages and denied their fundamental rights may now become a tool for brands to ‘whitewash’ their practices.”
European commission wants to 'simplify' sustainability
The Omnibus I proposal is part of a broader effort by the European Commission to “simplify” European sustainability legislation and reduce the administrative burden on companies. This proposal was submitted on February 26, 2025, and amends both the Corporate Sustainability Reporting Directive (CSRD) and the CSDDD. While the CSRD requires companies to report on their human and environmental impact, the CSDDD obliges them to take actual action against abuses in their value chain.
With the Omnibus I proposal, the Commission aims to relax these rules and better “align” them. On October 13, 2025, a majority of the European Parliament's JURI voted in favour of the proposal.
The plenary vote in the European Parliament will take place later this month. If the Parliament agrees, trilogue negotiations will follow between the Parliament, the Council, and the Commission. Member states will also have a say in the final text. Consequently, social sustainability in fashion appears to be reverting to a voluntary choice rather than a legal obligation.
The industry responds
Following the decision, Miriam Geelhoed, spokesperson for Dutch fashion trade association Modint, said: "The CSDDD aims to prevent abuses in international supply chains – a goal Modint fully supports. Many of our members have been voluntarily working for years in accordance with the OECD Guidelines for International Responsible Business Conduct and demonstrate that transition is possible.
"The proposed weakening of the law raises questions about its impact on the playing field. While it may result in a reduction in burdens for one party, it could shift responsibilities to a supply chain partner for another. We will therefore closely monitor its implementation and implementation. The uncertainty created by diverse and changing legislation is stagnating the development of sustainable policy and supply chain transparency.
"In the lead-up to a sectoral agreement on international corporate responsibility, INretail and Modint are collaborating with the Social and Economic Council, FNV Mondiaal, CNV Internationaal, and other partners on sectoral risk modules, including one on forced labor. These modules help companies do today what will become mandatory tomorrow. They are practical, aligned with daily practices, and implemented in a multi-stakeholder setting.
"So: We're choosing a course. Not because it's easy, but because it's necessary to protect our values."
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