The European Union is currently facing a critical test of its commitment to corporate accountability and environmental sustainability. As the continent emerges from a devastating heat wave, the European Parliament must make a crucial decision about the fate of the EU’s flagship corporate accountability law, the Corporate Sustainability Due Diligence Directive.

Background

The Corporate Sustainability Due Diligence Directive is a landmark piece of legislation that requires large companies operating in the EU to identify and address human rights and environmental harms in their operations and supply chains. The law is designed to promote corporate sustainability and ensure that companies are held accountable for their impact on the environment and society. However, lobbying by European and US companies, including the American Chamber of Commerce to the EU, has heavily influenced the European Commission’s “Omnibus proposal,” which would substantially weaken key provisions of the law.

• Industry groups in the US have been working to water down the law’s climate provisions, which require companies to adopt and put into effect a “transition plan for climate change mitigation” consistent with limiting global warming to 1.5 degrees Celsius above pre-industrial levels.
• European and US fossil fuel companies, such as ExxonMobil, have met with senior European Commission officials at least five times since the beginning of 2025 to discuss the law or related topics.

Climate Provisions Under Threat

The law’s climate provisions are particularly under threat, with industry groups in the US pushing to dilute the requirement for companies to “put into effect” climate mitigation plans. Instead, they propose that companies adopt a plan setting out “reasonable efforts” to tackle global warming. The Paris Agreement sets a target of limiting global warming to 1.5 degrees Celsius above pre-industrial levels. However, the production of fossil fuels is the primary driver of the climate crisis, accounting for about two-thirds of annual global greenhouse gas emissions. The EU’s Corporate Sustainability Due Diligence Directive requires companies to adopt and put into effect a “transition plan for climate change mitigation” that is consistent with the Paris Agreement. However, the “Omnibus proposal” would significantly weaken this provision.

Human Rights and Environmental Harms

The production of fossil fuels is linked to severe human rights and environmental harms, including toxic air, unsafe water, and polluted ecosystems. The

EU’s Corporate Sustainability Due Diligence Directive

is designed to address these harms by requiring companies to identify and address human rights and environmental abuses in their operations and supply chains. However, the “Omnibus proposal” would significantly weaken this provision, making it harder for victims of rights abuses to sue companies.

The European Parliament’s Decision

The fate of the EU’s corporate accountability law now rests with the European Parliament. Instead of succumbing to lobbying by powerful industries, parliamentarians should fight for a law that requires companies to take robust action against climate change and that holds corporations to account for human rights and environmental abuses worldwide. The European Parliament should reject the “Omnibus proposal” and instead support the original version of the law, which requires companies to adopt and put into effect a “transition plan for climate change mitigation” consistent with the Paris Agreement.

Conclusion

The European Parliament has a critical decision to make about the fate of the EU’s corporate accountability law. The fate of the law rests with the European Parliament, and parliamentarians should fight for a law that requires companies to take robust action against climate change and that holds corporations to account for human rights and environmental abuses worldwide. The European Parliament should reject the “Omnibus proposal” and instead support the original version of the law, which is essential for promoting corporate sustainability and ensuring that companies are held accountable for their impact on the environment and society.