The Corporate Sustainability Due Diligence Directive (CSDDD), adopted in June 2024, established the European Union (EU)’s first horizontal, risk-based framework obliging large undertakings to identify, prevent, mitigate, and account for adverse human rights and environmental impacts across their operations, subsidiaries, and global value chains. However, within months of the entry into force of the CSDDD, the Commission advanced the Omnibus I package under its competitiveness-driven simplification agenda, comprising two linked proposals: a ‘stop-the-clock’ Directive postponing application dates of the CSDDD, and a substantive amending Directive recalibrating inter alia the CSDDD. The latter was negotiated throughout 2025 and adopted on 24 February 2026.
In this submission, we discuss Omnibus I changes to CSDDD through the lens of the constitutional framework of EU values and the objectives of the EU’s external action. In particular, we aim to analyse the implications of a potential rollback on the observance of human rights. Against that backdrop, we showcase selected areas of regression and display that there is little evidentiary support that this regression is balanced out by advancing other objectives of EU action.
CSDDD and Omnibus I – how ‘attractive’ sustainability became ‘burdensome’
The 2024 CSDDD laid down rules on companies’ obligations concerning avoiding adverse human rights and environmental impacts and ensuring that those affected have access to justice and legal remedies. In an ambitious and pioneering turn, the CSDDD attempted to legalize the voluntary due diligence processes adopted by companies and steered by international guidelines (UNGP,OECD, and ILO).
Moreover, the CSDDD, despite being a private law instrument primarily targeting market fragmentation, clearly also aims to address human rights concerns outside of the EU. This follows from the logic put forward by the European Commission in its 2021 communication on trade policy review which included ‘ensuring that supply chains are sustainable and responsible’ through ‘mandatory environmental, human and labour rights due diligence’ within the core objectives of EU trade policy.
However, not long after the adoption of the CSDDD, the EU sustainability agenda was shaken by a normative U-turn adopted in a curious geopolitical context. On August 21st 2025, the United States and the EU issued a joint statement on the framework for an agreement on reciprocal, fair, and balanced trade. In this statement, the EU promised to ensure that the CSDDD does not pose undue restrictions on transatlantic trade by reducing administrative burden on businesses. After that, the sustainability regulations were subsequently relabelled from ‘open’ and ‘attractive’ (see European Green Deal) to burdensome and in need of simplification. The call to ‘reduce regulatory burdens’ advanced in Draghi’s report issued on September 16th, 2025 was repeated by the Commission in its Competitiveness Compass. Consequently, even before its compliance requirements started applying, the CSDDD underwent substantial revisions via the Omnibus I Directive.
The key ‘simplifying’ changes of Omnibus I encompassed: reducing the already narrow personal scope of the CSDDD to companies with a turnover exceeding EUR 1 500 000 000 and employing more than 5000 employees (compared to the original threshold of EUR 450 000 000 turnover and 1000 employees); limiting the due diligence process by confining in-depth assessment to direct business partners as a general rule; restricting the definition of ‘stakeholders’ and curtailing mandatory consultation at key due diligence stages; repealing the provisions on transition plans for climate change mitigation; replacing the turnover-based minimum cap on pecuniary penalties with a uniform ceiling of 3% of net worldwide turnover; and abolishing harmonised civil liability.
A regression in the realization of constitutional values and objectives
Omnibus I has been criticised as a regulatory rollback on the sustainability protection, depoliticising the internal market from democratic contestation. It was labelled as inconsistent with the Commission’s Better Regulation Agenda and adopted without the level of stakeholder engagement and evidentiary support needed. This makes its consistency with the principle of good administration and the EU’s rule of law value conspicuous. The legality of the Directive has also been challenged, given the setback to established protections of the fundamental rights enshrined in the Charter.
In our submission, we argue that Omnibus I may also not meet the non-regression principle for EU values and objectives, specifically considering the EU’s constitutional human rights commitments. Human rights constitute both an EU value underpinning its internal and external action (Article 2 TEU, Article 3(5) TEU, Article 21 TEU) and an objective of EU external action (Article 3(5) TEU, Article 21(1) TEU). The EU is obliged to pursue common policies and actions and a high degree of cooperation in all fields of international relations, to safeguard and consolidate human rights (Article 21(2)(a) and (b) TEU). In that respect, once a certain threshold of realization of human rights as EU values is achieved, regression should be treated with caution and, in some instances, even be prohibited.
The debate on the principle of non-regression, with respect to EU values, has concentrated especially around the value of the rule of law in recent years (thanks to democratic backsliding in countries like Poland and Hungary). In Repubblika, the CJEU explained that: ‘compliance by a Member State with the values enshrined in Article 2 TEU is a condition for the enjoyment of all of the rights deriving from the application of the Treaties to that Member State. A Member State cannot therefore amend its legislation in such a way as to bring about a reduction in the protection of the value of the rule of law, a value which is given concrete expression by, inter alia, Article 19 TEU’ (para 63).The principle of non-regression of EU values appears most relevant when such regression is systemic, serious, and persistent.
In that respect, it seems justified to consider that the EU should be held to the same standards as its Member States, as EU values apply equally to both. The Court itself recognised, at least to some extent, that the body of the case law developed in relation to national courts concerning the foundational principle of EU value of rule of law (effective judicial protection) is also applicable to itself mutatis mutandis (see SatCen, para 59, cf. opinion of AG Emiliou in Nicoventures, para 140: Advocate General Jääskinen in Vereniging Milieudefensie, para 132, and Bobek in Région de Bruxelles-Capitale, para 117). This symmetry should not be limited to specific obligations, such as ensuring effective judicial protection, but should also be extended more broadly to the general requirement not to regress in respect of those values. In other words, the standard of non-regression required from Member States should also apply to the European Union.
The principle of non-regression gained momentum due to the case-law concerning EU values, but it has also been discussed in the context of the EU’s obligations concerning its objectives. In that respect, arguments have been forwarded that once reached, the degree of achievement of a constitutional objective cannot be lowered. Even authors who disagree still indicate that EU institutions can introduce a step back on the fulfilment of the constitutional objective only after the ‘careful weighing of interests, as long as the measure does not infringe upon the core of the objective’.
Therefore, any law lowering the level of EU human rights protection, for its constitutional coherence, would require strong arguments demonstrating the necessity and balanced nature of such a policy. Against that backdrop, we analyse Omnibus I as a potential rollback on the EU’s human rights commitments, vis-à-vis the stronger and more intentional original CSDDD framework.
Omnibus I rollback on human rights
A comparative reading of the CSDDD and the Omnibus I revision reveals at least four concrete vectors through which human rights protection is lowered.
First, the scope of due diligence has been substantially narrowed. Whereas the CSDDD required companies to identify and assess adverse impacts across both direct and indirect business partners using a risk-based approach (Article 8), Omnibus I re-targets the in-depth assessment to direct (tier-1) business partners as a default, with any assessment beyond tier 1 triggered only where the company possesses plausible information of adverse impacts further upstream or downstream (Article 8(2)–(3), as amended; recital 39). Interestingly, even the Commission’s own Staff Working Document accompanying the Omnibus I proposal acknowledged that a strict tier-1 limitation would have ‘a detrimental effect on the effectiveness of due diligence since the main risks to human rights and the environment most often occur farther upstream’. The plausible information trigger, moreover, grants companies wide discretion in determining what information is ‘reasonably available’. This weakens identification and prevention of harms in deeper supply chain tiers, exactly where the gravest abuses like forced labour, child labour, and environmental degradation characteristically occur.
Second, meaningful stakeholder participation has been limited. The original CSDDD defined ‘stakeholders’ broadly to include employees, trade unions, affected individuals and communities, national human rights institutions, and civil society organisations. And, it required their consultation at five stages of the due diligence process, including when developing prevention and corrective action plans, deciding on suspension or termination of business relationships, and monitoring the effectiveness of due diligence measures (Article 3(1)(n) and Article 13). Omnibus I narrows the definition to persons and communities ‘directly’ affected, thereby excluding national human rights institutions and environmental CSOs from the guaranteed scope of engagement. It also reduces mandatory consultation to only three stages, removing the obligation to consult when suspending or terminating business relationships and when monitoring due diligence effectiveness (Article 3(1)(n) and Article 13, as amended; recitals 45–46). This narrowing diminishes both the quality of information received and the accountability of corporate due diligence processes.
Third, enforcement has been weakened on two fronts. On the administrative side, the original CSDDD stipulated that where Member States opted for a pecuniary penalty cap, it ‘shall be not less than 5% of the net worldwide turnover of the company’ (Article 27(4)). Omnibus I replaces this with a uniform ceiling of 3% and removes the requirement that fines be commensurate with worldwide turnover (Article 27(4), as amended; recital 48). On private enforcement, the amendment removes the harmonised civil liability clause in Article 29(1), which required Member States to ensure that companies could be held liable for damage caused by intentional or negligent failure to comply with their prevention and remediation obligations. This leaves the question of civil liability entirely up to national law (Article 29, as amended; Explanatory Memorandum). The practical consequence is a fragmented landscape of national tort laws, which have historically proven inadequate to hold corporations accountable for supply chain harms. This risks transforming due diligence into what critics characterise as a ‘tick-box exercise’ without meaningful consequences.
Fourth, the repeal of Article 22 on climate transition plans removes a central mechanism through which the CSDDD sought to internalise climate-related human rights and environmental risks in corporate strategy. The original provision required companies not merely to adopt but to ‘put into effect’ a transition plan aligning their business model and strategy with the 1.5°C Paris Agreement target and EU climate neutrality objectives (Article 22; recital 73). Omnibus I deletes the article in its entirety (recital 47). This deletion deprives the CSDDD of one of its most forward-looking tools and, as independent analysis notes, effectively shields major emitters from accountability at a moment when urgent action for the protection of environmental rights is needed.
Additionally, it must be underlined that by exempting approximately 95% of previously regulated companies, the CSDDD now loses the ‘network effect’ essential for systemic change, signalling a step back from the EU’s role as a global standard-setter committed to the sustained promotion and elevation of human rights standards. This policy objective, pursued through a range of trade measures such as human rights clauses, trade and sustainable development chapters, and generalized scheme of preferences, was supposed to be complemented by the private law regime extending the EU’s framework of legal protection through global supply chains. The coordination of these instruments was essential to the realisation of the EU’s constitutional mandate to protect, fulfil, and promote human rights in its external action. Conversely, a retreat from one of these instruments, particularly in the rapid and unbalanced manner observed in the case of Omnibus I, risks undermining the EU’s authority and the legitimacy of its broader human rights agenda.
Failed balancing exercise
We discussed above that in an event that policymaking demands a regression in the level of protection of values or EU objectives, it needs careful weighing by policymakers. Even assuming that stepping back from CSDDD human rights commitments can actually contribute to objectives such as free trade (Article 3(5) TEU) or balanced growth (Article 3(5) TEU) and hence, by securing the EU’s economic capability indirectly to advancing EU values such as human (cf. Draghi report), such trade-off should be based on evidence and justified.In that respect, it is not entirely persuasive that Omnibus I is a measure that actually strengthens any of the objectives listed above.
Contrary to the deregulatory rhetoric accompanying the Omnibus I package, the original 2022 CSDDD proposal explicitly framed the measure as an instrument to bolster, rather than hinder, European competitiveness. The Commission’s initial rationale emphasised that a harmonised EU-wide standard would create a genuine ‘level playing field’, providing companies with the legal certainty and risk management tools necessary to thrive in a global market. The legislative financial statement accompanying the CSDDD expressly stated that ‘the CSDDD already sets out a harmonised regulatory framework for corporate sustainability due diligence […] ensuring a level playing field’ and that ‘[s]ignificant differences in requirements […] between Member States would create additional costs and complexity for companies operating across borders, which would be detrimental to the single market’. By replacing a fragmented patchwork of unilateral national laws with a single European framework, the CSDDD aimed to reduce long-term compliance uncertainty and increase the attractiveness of EU firms for sustainability-oriented investors.
In stark contrast, the Omnibus I package lacks a robust evidentiary foundation, having conspicuously bypassed the Commission’s own ‘Better Regulation’ requirements for public consultation and a dedicated impact assessment. Its justification relies on broad references to the Draghi report, which, while identifying regulatory burdens, simultaneously acknowledged that addressing market fragmentation requires deeper harmonisation to unleash the Single Market’s potential. Far from simplifying the landscape, the liquidation of the harmonised liability regime under Article 29 destabilizes the level playing field, forcing companies to face unpredictable liability across 27 disparate national systems. Consequently, Omnibus I has been found to ‘cause uncertainty to European companies and undermine their business and investment strategies and punish those firms that voluntarily comply with human rights standards and those that have already taken measures to implement’.
Conclusion
We argue that, from a constitutional perspective, the Omnibus I package might be inconsistent with the non-regression principle, considering EU values and objectives. In the absence of solid, proposal-specific evidence that deregulation would improve firms’ competitive position more than the harmonised baseline the original CSDDD was designed to provide, the balancing exercise fails on its own terms. The competitiveness gain and economic benefits for business remain speculative, while the human rights regression is concrete and documented. Taking into consideration widespread criticism attacking the legality of Omnibus I, this post offers an additional framework, which can serve as a starting point in the analysis of not only Omnibus I but the whole Omnibus package. Further regulatory ‘simplification’ risks even more concerns about the systemic, serious, and persistent nature of the constitutional U-turn, detrimental to EU values and objectives and its constitutional architecture.