About the European Commission’s Omnibus Simplification Proposal on EU Sustainability Due Diligence and Reporting Laws
In 2024, the President of the European Commission announced that the Commission would bring forward a proposal to simplify requirements and reduce burdens on smaller companies, including in connection with the recently adopted Corporate Sustainability Due Diligence Directive (CSDDD) and the more established Corporate Sustainability Reporting Directive (CSRD). In February 2025, the Commission announced its ‘Omnibus Simplification Proposal’. While the goals are reasonable ones for European Union (EU) policy-makers to pursue, in fact the proposal risks making life more complicated for both large and small companies.
You can read Shift’s initial assessment of the Omnibus Proposal here. In it, we explain how the proposal would make it much harder for companies to ‘know and show’ that they are managing the human rights and environmental risks they face, and leave them on the back foot when they are ‘named and shamed’ by the media and NGOs when things go wrong in their supply chains.
Shift will continue to be actively involved in the Omnibus legislative process based on our mission to advance alignment of influential standards with the UN Guiding Principles on Business and Human Rights. We will regularly share resources and updates here, so please check back in or sign up to our newsletter here.
About the EU Corporate Sustainability Due Diligence Directive
Beginning in 2017, several European states including France, Germany and the Netherlands began to adopt versions of human rights due diligence legislation. This created momentum for the EU to help level the playing field.
In 2022, the EU began negotiating a draft Corporate Sustainability Due Diligence Directive (CSDDD) which was finally adopted in May 2024. During this time, Shift’s focus was on ensuring the CSDDD was anchored in the international standards on sustainability due diligence – the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises. Despite limitations with regard to the scope of companies covered under the Directive, and limited obligations with regard to due diligence on downstream impacts, the core content of the final law was substantially aligned with the UNGPs – making it more likely to be both impactful for people and planet and manageable for companies to implement. The Directive provides that EU Member States have two years to transpose it into their national laws. Enforcement would then commence one year later for the first batch of covered companies, with the others following after. The Directive was expected to cover more than 5500 companies. For more information, check out Shift’s responses to Frequently Asked Questions about the CS3D.
How should companies respond to the current regulatory uncertainty?
Given the uncertainties created by the Omnibus Proposal and negotiation process, our advice to companies that want to know how they should respond is simple – keep doing risk-based due diligence in line with the existing international standards. That remains the single best investment companies can make to prepare to meet current and future demands, whether from investors, lenders, customers, civil society or EU policy-makers as this process moves forwards.
Core Resources
Our analysis
5 resources
Frequently Asked Questions about the EU Corporate Sustainability Due Diligence Directive
In this resource, Rachel Davis (Co-Founder), and Ruben Zandvliet (Deputy Director for Standards), answer companies’ frequently asked questions about the new Corporate Sustainability Due Diligence Directive. Since the approval of the Corporate Sustainability Due Diligence Directive (CS3D) by senior officials from EU Member States in Council on 15 March, we’ve received numerous questions from companies […]
Aligning the EU Due Diligence Directive with the International Standards: Key Issues in the Negotiations
Aligning the CS3D with the core concepts in the international standards The EU is currently in the process of negotiating a legal instrument that will establish new corporate human rights and environmental due diligence duties across the single market – the draft Corporate Sustainability Due Diligence Directive (CS3D). At the heart of the negotiations is […]
Designing an EU Due Diligence Duty that Delivers Better Outcomes
What is the CS3D? Starting in 2022, the European Union has been negotiating a draft Directive on Corporate Sustainability Due Diligence (CS3D), with discussions on a final law expected to begin by mid-2023. The draft Directive aims to ensure companies active in the single European market contribute to sustainable development by preventing and addressing negative human rights and environmental impacts. […]
Shift’s Analysis of the EU Commission’s Proposal for a Corporate Sustainability Due Diligence Directive
On 23 February 2022, the European Commission released its ‘Proposal for a Directive of the European Parliament and of the Council on Corporate Sustainability Due Diligence. Its overall objective is to ensure that companies active in the internal market contribute to sustainable development …through the identification, prevention and mitigation, bringing to an end and minimization […]
“Signals of Seriousness” for Human Rights Due Diligence
This discussion draft is intended for the consideration of the European Commission and other stakeholders as the Commission develops proposals on mandatory human rights and environmental due diligence (mHREDD) and considers how national regulators would implement any such legislation. Shift is submitting this draft together with our formal response to DG JUST’s consultation on a […]
Previous Comments and Analysis by Shift
- Rachel Davis’ March 2022 COMMENTS to the European Parliament RBC Working Group on the release of the Commission’s proposal
- Our March 2022 ANALYSIS of the Commission’s proposal for a draft Directive
- Our October 2021 Key Design Considerations for the Enforcement of Mandatory Due Diligence, developed in collaboration with the Office of the UN High Commissioner for Human Rights
- Our August 2021 viewpoint on how legislating a new standard of conduct CONNECTS TO OUTCOMES FOR PEOPLE
- Our July 2021 viewpoint on the relationship between HUMAN RIGHTS AND ENVIRONMENTAL DUE DILIGENCE
- Our June 2021 viewpoint on the need to include SMEs in the scope of new regulations while allowing them APPROPRIATE FLEXIBILITY
- Our April 2021 recap of the mHRDD debate in Europe (see below)
- Our February 2021 RESPONSE to the European Commission’s initial consultation on the need for an initiative on sustainable corporate governance
