Introduction
Although only a short time has passed since their adoption, the European Union’s corporate sustainability rules are already under threat of being weakened by their own creator, the European Commission. Under the proposed Omnibus Simplification Package, the Commission aims to amend and “clarify” key corporate sustainability regulations to “boost competitiveness and unleash growth” of the European Union (Jemal & Schmidt, 2025; European Commission, 2025). Furthermore, the EU used its sustainability framework as a bargaining chip during the trade negotiations with the United States to ensure the low tariffs on European products (ASUENE, 2025). To be more precise, the Union promised to reduce the administrative burden of its sustainability laws on American companies and to provide “flexibility” regarding import fees tied to carbon emissions (Schenkman, 2025). This recent discourse by the Commission undermines the original goal of these regulations: ensuring that businesses move beyond the profit-maximising paradigm and integrate environmental and social considerations into their strategies. This article analyses what are the EU corporate sustainability rules, how they can advance human rights and how the Omnibus Package can eliminate the already made progress.
Furthermore, the Union adopted the Corporate Sustainability Due Diligence Directive (CSDDD). This directive requires companies to implement a due diligence process that follows the six steps established by the Organisation for Economic Co-operation and Development’s (OECD) Due Diligence Guidance for Responsible Business Conduct (C.Sessler et al., 2024). This involves various tasks such as integrating due diligence into company policies and management systems (C.Sessler et al., 2024). In addition, companies will have to identify and assess potential or actual negative impacts on human rights and the environment, and take steps to prevent, stop, or minimise those impacts (C.Sessler et al., 2024). Companies must also monitor and evaluate the effectiveness of their measures, communicate publicly about their due diligence efforts, and provide remediation when harm occurs (C.Sessler et al., 2024). Importantly, the directive includes the whole value chain, meaning the company should also consider the operations of its subsidiaries and business partners (for example, suppliers, contractors, distributors) (Connellan et al., 2024).
Finally, some other key sustainability regulations in the EU include the Carbon Border Adjustment Mechanism (CBAM) which “is a system to confirm that a price has been paid for the embedded carbon emissions generated in the production of certain goods imported into the EU” and EU Taxonomy that “allows financial and non-financial companies to share a common definition of economic activities that can be considered environmentally sustainable” (European Commission, n.d.-a, European Commission, n.d.-b).
Although affirmed multiple times, it is still important to emphasise the strong interdependence between human rights and the environment (Heri, 2025). In an advisory opinion of the International Court of Justice (ICJ) regarding the legal duties of states in relation to climate change, the Court stated that “the protection of the environment is a precondition for the enjoyment of human rights” (Heri, 2025). The ICJ further noted that the severe negative impacts of climate change may “significantly impair the enjoyment of certain human rights”, including the rights to life, a healthy environment, health, an adequate standard of living, privacy, family and home, as well as the rights of women, children, and Indigenous Peoples (Schaugg et al., 2025).
Therefore, sustainability regulations, with their aim to mitigate environmental issues, should be considered as one of the direct tools to uphold and prevent human rights violations. Moreover, since these regulations mandate applicable companies to transform their business models to carbon-neutral, it allows the EU to achieve its 2050 target of becoming a net-zero economy (Dupont, n.d.). This can generate a meaningful effect regardless of whether only the EU reduces its greenhouse gas emissions, since preventing even a 0.1 degree Celsius increase in temperature can save lives (Amorim, 2024).
Moreover, it should be mentioned that in some instances, the regulations such as CSRD and CSDDD extend beyond the European Union and also apply to companies that are not based in the EU but operate within it (Accountancy Europe, 2025). Additionally, CBAM incentivises exporters from non-EU countries to adopt sustainable practices (Joxe Mari Barrutiabengoa et al., 2025). Therefore, the extraterritorial reach of these regulations can contribute to reducing greenhouse gas emissions in non-EU countries as well.
Rights of Children
As explained earlier, under the CSDDD, companies will be required to assess and identify potential or actual adverse impacts on human rights, including the rights of children. The directive explicitly recognises the UN Convention on the Rights of the Child (UNCRC) as a core legal basis for due diligence obligations regarding children’s rights (UNICEF, n.d.). Therefore, in practice, companies will have to ensure that the key rights of children, such as access to health, education, and an adequate standard of living, are not violated within their value chains (UNICEF, n.d.). Moreover, companies will have to identify if any children related to their business-activities are involved in economic exploitation, hazardous work, or any form of sexual exploitation, abuse, or trafficking (UNICEF, n.d.).
For example, it is widely known that cobalt mining in the Democratic Republic of Congo severely impacts the children in the country and violates their rights (Salama, 2025). In 2024, only in the two provinces of Haut-Katanga and Lualaba, the International Labour Organization (ILO) identified and reported 6,200 children working in the mining sector (International Labour Organization, 2024; Salama, 2025). One of the strengths of CSDDD is that companies relying on cobalt under this directive will be required to demonstrate that their cobalt supply is not sourced through child labour (Nolan, 2025). Crucially, there will be a possibility for children and parties representing them to submit complaints directly to companies (UNICEF, n.d.). This can be considered a significant step toward ensuring accountability and justice.
Economic Rights
As expected, the sustainability rules interact with multiple human rights issues. The final human rights area discussed in this article is one of the significant and neglected aspects of CSRD, the obligation to disclose the information regarding wages (European Commission, 2023). Under the Disclosure Requirement S1-10 – Adequate Wages: “The undertaking shall disclose whether or not its employees are paid an adequate wage, and if they are not all paid an adequate wage, the countries and percentage of employees concerned”. In the European Economic Area, the adequate wage should be higher than 60 percent of the median national wage and 50 percent of the gross average wage (European Commission, 2023).
This is an important step forward, as greater transparency about company wages allows consumers and investors to make more informed decisions before engaging with a particular business. The same logic can be applied to the gender pay gap, as it must also be disclosed under the CSRD (European Commission, 2023). This can contribute to the advancement of women’s economic rights.
The Omnibus Simplification Package is a highly polemic and paradoxical proposal introduced by the European Commission aimed at “simplifying” sustainability regulations. More than 360 civil society organisations have spoken out against it in their joint letter, explaining that it “erodes the EU’s corporate accountability commitments and slashes human rights and environmental protections” (Amnesty International et al., 2025). This concern, as written in the letter, manifests in several ways. For example, under the omnibus, companies would no longer be required to implement their climate transition plans, which would severely hinder climate action (Amnesty International et al., 2025).
Moreover, companies will only be obliged to assess harms linked to their direct business partners (such as contractors), excluding indirect business partners like a supplier’s supplier (Amnesty International et al., 2025). While it is true that companies are still expected to act if they have “plausible information” of abuses from their indirect business actors, civil society organisations are concerned with the vagueness of “plausible information” and its possibility to be interpreted broadly (Amnesty International et al., 2025). This adds on to the fact that companies would no longer be obliged to terminate contracts, even in cases where abuses are likely to continue (Amnesty International et al., 2025).
Another problematic aspect is that the CSRD will also have less scope, as the omnibus will require less companies to comply with the directive (Accountancy Europe, 2025b). For example, the number of companies covered by CSRD will be reduced by 80 percent (Accountancy Europe, 2025b).
As mentioned, the proposal is paradoxical, as although it aims to reduce the burden for private companies, the companies themselves are not fond of this package. For example, as Sustainability Magazine reports (Darley, 2025):
A group of 11 major global organisations including DP World, Ferrero, L’Occitane, Mars, Nestlé, Primark, Signify and Unilever has written to the European Commission urging it not to weaken existing sustainability reporting standards through its upcoming omnibus package (Darley, 2025).
Furthermore, #WeAreEurope in partnership with HEC business school, conducted a survey and collected responses from business leaders involved in CSRD implementation (Segal, 2025). According to a survey, 61 percent of respondents are somewhat or very satisfied with the CSRD in its current form, meanwhile only 17 percent are dissatisfied (Segal, 2025).
Naturally, beyond ethical reasons such as caring for the environment, another reason why companies oppose the Omnibus is that they have already invested heavily in implementing the new regulations, meaning that any legal uncertainty would only undermine those investments (Business & Human Rights Resource Centre, 2025). In sum, it is clear that Omnibus is a debatable package from both economic and human rights points of view. Especially considering that in its advisory opinion, the European Central Bank warned the package could expand risks for the EU’s economy, investors, and the bloc’s broader sustainability objectives (Costa, 2025).
Conclusion
As illustrated by this article, the EU’s corporate sustainability rules can, at least on paper, enhance human rights protection in Europe and beyond. At first sight, one might not immediately connect environmental issues to human rights, yet there is a strong interdependence, and all elements of ESG ultimately can address human rights concerns. However, the Omnibus Package threatens to hinder progress in advancing human rights as it simplifies regulations in ways that are rejected by both civil society and some parts of the business community. While the future of these corporate sustainability rules remains uncertain, the EU institutions should firmly engage with every stakeholder to ensure that the package will not bring more harm than benefit.
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