Members of the European Parliament’s legal committee have approved amendments that significantly narrow the scope of the Corporate Sustainability Due Diligence Directive (CSDDD), responding to concerns from businesses about competitiveness and regulatory burdens.
Originally, the directive would apply to companies with over 1,000 employees and €450 million in annual turnover. Under the revised proposal, it would apply only to companies employing at least 5,000 individuals or having at least €1.5 billion in turnover. The proposal also seeks to remove mandatory transition plans that businesses were expected to implement under the earlier draft.
Business groups argue that the original requirements would place heavy compliance costs on companies, especially in sectors under stress from global market volatility and supply chain disruptions. On the other hand, environmental and human rights advocates warn that these changes weaken the directive’s ability to drive sustainability, reduce adverse environmental impacts, and promote responsible corporate behavior.
What’s next:
The directive will still go through the full legislative process: negotiations between the Parliament, the European Commission, and national governments. There is considerable debate over balancing ambitious environmental goals with economic competitiveness. Stakeholders are watching closely how the final version will shape obligations for companies operating across EU borders.
For Everest Legal:
We can support clients in monitoring the evolving legal requirements, conducting due diligence audits, and adapting internal governance strategies to ensure compliance without imposing unsustainable costs. The changes signal that sustainability regulation is not going away—but the regime’s design remains negotiable.