Post-Brexit, many of the general public in the UK will not be thinking about EU corporate regulations. But what’s happening internationally, and especially with the UK’s biggest trading partner, makes a huge difference to legal requirements and practices of corporations who straddle over borders with their operations. For government, business, unions and NGOs, it’s vital to understand.

Last week, the European Parliament adopted its negotiating position on the Omnibus I package, voting to further weaken the corporate sustainability package by watering down company obligations and reducing the number of businesses required to report on their sustainability. 

What happened?

• Scope slashed: only companies with over 1,750 employees and €450m turnover will be in scope of the Corporate Sustainability Reporting Directive (CSRD). This is a reduction of -92% of companies that were originally within scope.
• Value chain capped: Companies can’t request information from out-of-scope partners with <5,000 employees unless absolutely necessary. They will therefore be relying mostly on voluntary or existing data.
• Legal ambiguity: The position deleted measures ensuring EU-wide harmonisation of civil liability, access to third-party representative actions, and the mandatory application of national civil liability rules in cross-border claims.
• Sector-specific standards weakened: The European Commission will issue voluntary, not mandatory, sector-specific guidance

As the EU weakens its sustainability rules, we must remember who pays the price when accountability is diluted: the workers who clean offices, guard buildings, transport goods, produce food, and stitch clothes.

This vote risks keeping due diligence as a tick-box exercise, rather than a meaningful tool to prevent unsafe working conditions and exploitation. Without locking in these requirements into law, workers rely on the good will of corporations for cooperation and best practice, rather than living and working with the assurances that their dignity and rights have protection under law.

Workers face growing risks as supply chains face greater turmoil; we need stronger action from policy-makers, to build systems ensuring accountability and collaboration.

This backslide is not insurmountable. FLEX – along with wider civil society and leading global brands – continues to push for worker-centred approaches and effective legislation in the UK. To truly deliver justice for workers, including migrants and those most at risk, here are some key principles we are pushing for:

1. Rights-holders at the centre

Prioritisation must be led by rights-holders themselves, not imposed top-down. That means meaningful engagement with workers throughout the human rights due diligence cycle, with explicit inclusion of those often left out: women, migrant workers, informal workers, smallholders, and marginalised communities.

2. Ownership and accountability

Companies must go beyond “understanding risks”, to taking responsibility for preventing and addressing them. They must use an intersectional lens to capture how different forms of disadvantage overlap.

3. Proportionality vs. parameters

Expectations should be tailored to enterprise size, leverage and influence, but size is not a proxy for risk. Small businesses, and public sector bodies, can also cause harm, and the law must reflect this.

4. Failure to prevent

Once it is shown that harm has occurred, the burden of proof must be on companies to show they took all reasonable steps to prevent it. Enterprises should be liable for harm, loss and damage if they fail to prevent adverse human rights and environmental impacts.

5. Shared responsibility across supply chains

Due diligence cannot mean burden-shifting. Large enterprises must not simply pass obligations downwards, but share responsibility and address the impacts of their own business models and purchasing practices.

We continue to stand with allies to urge negotiators in the upcoming trilogue discussions to bring the core principles of CSDDD and CSRD  to the forefront – ensuring that EU corporate sustainability laws protects workers and challenges labour exploitation.