S&D in European Parliament yields to EVP pressure: fewer climate regulations

Following threats from the Christian-democratic EVP to abolish the entire so-called anti-look-away law with support from far-right groups, S&D social democrats and Renew liberals agreed to a compromise that significantly weakens the due diligence obligation for companies.

The CSDDD directive, which obliges companies to address abuses by suppliers and customers, will now only apply to large enterprises with at least 5,000 employees and a turnover exceeding 1.5 billion euros. This is a significant increase compared to the previous threshold of 1,000 employees and 450 million euros.

The compromise also includes adjustments that largely exempt smaller companies from reporting obligations. The accountability requirement is more risk-based: companies must focus on direct business partners instead of entire chains.

Environmental activists view the new agreement as a step backward in the fight against climate change and human rights violations. According to them, the decision to raise the thresholds for companies means fewer companies will fall under supervision.  

Eco-activists added that small and medium-sized enterprises, which were previously required to comply with environmental standards, will now remain unsupervised. They argue this could undermine the effectiveness of the directive and make companies less "transparent" about environmental and social risks. 

The agreement, reached after days of intense negotiations, is part of the first major European law aimed at simplifying EU regulations. With this, the new European Commission (‘VDL-2’) is responding to complaints from the business community. According to the EVP Christian democrats, the adjustment is necessary to stimulate European growth and employment. 

The S&D group reluctantly yielded to EVP pressure. They stated that the compromise “was not the preferred option,” but that the alternative route—a right-wing majority with an even more severely watered-down proposal—would have produced a worse outcome. The liberal Renew Europe group ultimately aligned behind the same position.

The move caused dissatisfaction within the social-democratic ranks. The Dutch MEP Lara Wolters, who had thus far been the negotiator on behalf of S&D, resigned her position in protest against the change in direction. She stated that her position had become untenable after her own law, aimed at holding companies accountable for abuses, was weakened.

The revised arrangements will be voted on next week in the responsible committee of the European Parliament. A plenary vote will follow later this month. Afterwards, negotiations will begin with the ministers of the 27 EU countries, who must agree before the new simplified rules are definitively introduced.