Leading sustainability initiatives urge EU policymakers to consider adapting the Omnibus proposal for better risk management and worker and environmental protection

Today, seven sustainability initiatives – including the Fair Labor Association, amfori, Cascale, Ethical Trade Norway, ETI Sweden, Fair Wear, and the Social & Labor Convergence Program (SLCP) – bringing together over 6,000 member companies and affiliates with extensive experience in responsible supply chain practices – call on EU policymakers to ensure that the core elements of the EU sustainability due diligence and reporting framework remain aligned with internationally recognized standards, namely the UNGPs and OECD Guidelines, in light of the recently published Omnibus proposal to amend key regulations.

The organizations welcome the European Commission’s efforts to simplify due diligence requirements and ease the burden on European businesses. However, this simplification should not come at the cost of weakening due diligence. They stress that the current proposal does just that – while also creating unintended consequences for risk management, increasing unpredictability and complexity, and ultimately adding to corporate burden and costs.

Key recommendations to EU policymakers:

1. CSDDD: Proportionate and risk-based approach must be preserved
   The current Omnibus proposal weakens due diligence obligations by restricting them to direct suppliers (unless a company has plausible information about indirect partners). By shifting responsibility to a reactive approach, whereby in-depth assessments only occur after a potential harm is flagged, the proposal could lead to higher remediation costs compared to a proactive, prevention-focused risk-based approach grounded in the UNGPs and OECD Guidelines.
   
   Effective risk management makes business sense:
   Major risks in global supply chains often lie beyond direct suppliers. Effective due diligence is continuous; it is not a periodic check on select suppliers. Arbitrary limitations increase business risks and costs, whereas deeper supply chain knowledge and effective risk management improves preparedness and resilience.
   
   Undermining stakeholder engagement:
   Removing national human rights and environmental institutions and civil society organizations from mandatory stakeholder engagement will weaken companies’ ability to implement appropriate prevention and remediation plans. Leaving these groups out of the process will mean missing out essential expertise and knowledge that only they can provide.
2. CSDDD: Harmonized enforcement for more legal certainty
   Having EU-wide mandatory due diligence legislation should bring increased clarity of expectations and, overall, greater legal certainty for businesses. The current proposal poses the risk of a fragmented litigation landscape. The organizations call for the original enforcement mechanisms to remain intact, keeping the level playing field and ensuring legal clarity.
3. CSRD: Invested businesses need certainty
   Narrowing the scope of the CSRD will exclude 80% of companies currently subject to it, undermining the efforts of those companies that have been preparing for reporting under the CSRD – now confronted with legal uncertainties and internal struggles.
   In addition, the Omnibus proposal aims to limit the “trickle-down effects” on non-reporting companies. By doing so, it risks disrupting alignment with other EU regulations, which require companies to engage with suppliers and collect value chain data.

Ultimately, the organizations believe that simplifying due diligence and reporting requirements can be achieved without moving away from the spirit of international standards. The organizations call on co-legislators to engage with them to make the simplification exercise both effective and meaningful.