EU: Council sides with the Commission on postponement of corporate sustainability reporting and due diligence directives

On 26 March, the Council of the EU adopted its position on the first part of the omnibus package presented by the Commission. This so-called ‘Stop-the-clock’ mechanism provides for a two-year postponement of the application of the CSRD for companies that have not yet applied it, as well as a one-year postponement of the CSDDD. EU member states’ economy ministers have proposed a text identical to that of the Commission. It must pass a final stage in the European Parliament on 1 and 3 April, because an emergency procedure has been requested by the European People’s Party before possible negotiations if the deputies propose even greater postponements. “In view of significant implications for the business community, the Polish presidency has treated this proposal with utmost priority with the aim of providing EU companies with the necessary legal certainty as regards their reporting and due diligence obligations,” the Council says in a statement. The second omnibus text, which amends the substance of the corporate sustainability reporting and due diligence directives, will only be examined at a later stage, but the heads of state and government want it to be approved “as soon as possible” in 2025.

Coalition to uphold sustainability standards in France

On the initiative of French socialist MP Dominique Potier, rapporteur of France’s due diligence law adopted in 2017, politicians, union leaders, NGOs and business leaders met on 25 March at the National Assembly. They want to create a coalition to “federate forces” and lead the battle against employers’ organisations and supporters of deregulation. “There is great concern about the political context in the United States, which is upsetting the established order. The European model cannot give up what makes it special. If Europe enters into competition solely through the prism of the economy, it will lose out, and so will the workers that I represent,” said Marylise Léon, secretary general of the CFDT union. While they deplore the attacks on sustainability standards, the participants want to remain hopeful. Pascal Durand, former MEP and CSRD rapporteur, points out that 30 German companies have published their non-financial report in this case, despite the directive not having been transposed into national legislation (as in some 15 member states). Questioned in the Assembly on the same day, economy minister Éric Lombard, reaffirmed his intention to retain the civil liability regime for European company directors in the event of a breach of the due diligence rules. The Commission is proposing to remove it as part of the omnibus directive. The minister nevertheless defends limiting to direct suppliers companies’ obligations to prevent and remedy social and environmental damage.