Opinion of the European Economic and Social Committee – Proposal for a Directive of the European Parliament and of the Council amending Directives 2006/43/EC, 2013/34/EU, (EU) 2022/2464 and (EU) 2024/1760 as regards certain corporate sustainability reporting and due diligence requirements
Date: 2025-06-18
Institutions: European Economic and Social Committee
Subjects: European standard, activity report, corporate social responsibility, disclosure of information, environmental impact, large business, small and medium-sized enterprises, standard, sustainable development, trade information








C_202504212EN.000101.fmx.xml












Official Journal of the European Union


EN
C series













C/2025/4212


20.8.2025






Opinion of the European Economic and Social Committee
Proposal for a Directive of the European Parliament and of the Council amending Directives 2006/43/EC, 2013/34/EU, (EU) 2022/2464 and (EU) 2024/1760 as regards certain corporate sustainability reporting and due diligence requirements


(COM(2025) 81 final – 2025/0045 (COD))


(C/2025/4212)


Rapporteur: 
Matteo Carlo BORSANI






Advisor


Eleonora MARINO (for the rapporteur)




Legislative procedure



EU Law Tracker





Referrals


European Parliament, 31.3.2025
Council of the European Union, 3.4.2025




Legal basis








(1)


Articles 50 and 114 of the Treaty on the Functioning of the European Union










(2)


Articles 173 and 175 of the Treaty on the Functioning of the European Union










(3)


Article 192(1) of the Treaty on the Functioning of the European Union








European Commission documents



COM(2025) 81 final – 2025/0045 (COD)


Summary





Relevant Sustainable Development Goals (SDGs)



SDG 9 Industry, innovation and infrastructure


SDG 12 Responsible consumption and production


SDG 13 Climate action





Section responsible


Single Market, Production and Consumption




Adopted in section


23.5.2025




Adopted at plenary session


18.6.2025




Plenary session No


597




Outcome of vote
(for/against/abstentions)


166/4/8




1.   RECOMMENDATIONS

The European Economic and Social Committee (EESC) takes note of the European Commission’s proposals and expresses its concern regarding both the brevity of the consultation period and the limited inclusion of key stakeholders in the debate surrounding the proposals, and recommends the following:








1.1.


the EESC takes notes of the Omnibus proposal, which is meant to be a first step towards regulatory simplification. The EESC emphasises the importance of ensuring that simplification measures respect the Union’s high environmental, social, human rights and women’s rights standards, striking a balanced approach that supports businesses and investors, protects workers and serves the broader interests of society;












1.2.


we urge the Commission to consult the EESC on the European Sustainability Reporting Standards (ESRS) standards that will give substance to the simplification proposed;












1.3.


the EESC also underlines the importance of improving the quality of sustainable corporate governance, including, where appropriate, the involvement of workers, entrepreneurs, and other relevant stakeholders;












1.4.


the EESC calls on the co-legislators to allocate adequate time for inclusive consultation with stakeholders and social partners. Companies need legal certainty and long-term predictability;












1.5.


the current scope of the Corporate Sustainability Reporting Directive (CSRD) has led to compliance burdens, especially for Small and Medium Enterprises (SMEs). The EESC acknowledges that SMEs in particular find it challenging to implement sustainability and transparency processes. SMEs and auditors need more assistance in order to become compliant, which is essential because protecting European values and social models is of paramount importance;












1.6.


exercising corporate due diligence is essential for ensuring responsible business conduct and fostering sustainable value chains. The EESC calls for clear, proportionate rules and penalties, which are crucial for enabling companies to effectively comply with their obligations;












1.7.


the EESC underlines the importance of establishing a level playing field in the area of due diligence, ensuring that all companies are subject to the same clear and fair rules. This is essential for avoiding fragmentation across the single market and for promoting responsible business conduct;












1.8.


the EESC therefore acknowledges the Commission’s intention to refocus certain due diligence obligations to companies’ own operations, subsidiaries and direct business partners, but asks that a derogation be considered for companies with fewer than 500 employees operating in high-risk sectors, while pointing out that all companies have the obligation to respect human rights. The EESC also urges legislators to clarify that companies should take appropriate measures to conduct in-depth assessments, based on a risk-based approach and guided by their own mapping activities. Additionally, the EESC calls on the co-legislators to reconsider the choice of the concept of ‘plausible information’ to ensure greater legal certainty;












1.9.


the EESC regretfully acknowledges the removal of the possibility for victims to be represented by NGOs or trade unions in lawsuits and expresses concern that this may limit access to justice for affected individuals. The EESC encourages further reflection on how to ensure effective legal support for victims, particularly those facing structural obstacles to accessing remedies;












1.10.


the EESC takes note of the proposal to introduce a Carbon Border Adjustment Mechanism (CBAM) exemption for small importers below the threshold of 50 tonnes net mass. However, it recommends that this exemption be balanced by appropriate compensatory measures for EU producers, notably by exempting equivalent EU-made goods from the Emissions Trading System (ETS) free allocation phase-out (decalage), or alternatively by limiting the scope of the exemption in cases where it creates clear competitive distortions;












1.11.


the EESC recommends that the Commission introduce an annual review mechanism for default carbon price values used in CBAM compliance. These values should be updated annually based on third-country carbon pricing data to prevent systematic underestimation and ensure alignment with EU ETS benchmarks.




2.   EXPLANATORY NOTES


Arguments in support of recommendation 1.1









2.1.


The EU holds a leading position in sustainability legislation with high standards. Ensuring the competitiveness of businesses driving the transition is essential for maintaining this leadership and our high standards. Regulating sustainability reporting improves transparency and supports investors, helping to close information asymmetry gaps.












2.2.


A regulatory framework that fosters growth, facilitates business activity and simultaneously safeguards and empowers individuals is essential for enhancing the EU’s competitiveness and achieving its climate and sustainability objectives. However, as highlighted in Mario Draghi’s report The Future of European Competitiveness (1), a high regulatory flow has been a key factor – among others – in widening the competitiveness gap between the EU and other major economies, such as the United States. Nevertheless, the EESC considers that competitiveness goes hand in hand with innovation and the green transition.












2.3.


The EESC highlights the importance of sustainability reporting requirements and human rights due diligence rules for businesses, workers, business confederations, trade unions, the economy and society as a whole.












2.4.


The European Union has made significant progress in the areas of sustainability reporting and corporate sustainability due diligence. The CSRD and the Corporate Sustainability Due Diligence Directive (CS3D) constitute a pioneering regulatory framework that translates the objectives of the EU Green Deal and the EU sustainable finance agenda into concrete obligations for businesses. Sustainability information is especially important to company stakeholders such as investors, workers, NGOs, social partners and consumers. The involvement of stakeholders and Civil Society Organisations (CSOs) (such as social partners) in materiality analyses and in due diligence processes (such as risk analyses) needs to be guaranteed, avoiding the limitations laid out in the definition and ensuring the involvement of these stakeholders throughout the due diligence process.












2.5.


Addressing carbon leakage and ensuring fair competition through the CBAM represents one of the key elements of the EU Green Deal. However, while the mechanism is a crucial tool for achieving the EU’s climate objectives, it has also introduced substantial regulatory and administrative burdens, particularly for businesses operating in complex international supply chains (2).












2.6.


In this context, the Omnibus proposal represent a first step towards reducing red tape, ensuring legal certainty and enabling companies to effectively comply with realistic and proportionate legal requirements. However, they do not provide a resolution to the problem of the lack of assistance from the Commission and Member States that companies are calling for. The objective of this initiative should go beyond merely helping businesses meet their obligations; it should also strengthen their role in advancing the EU’s broader sustainability goals, while upholding the highest standards in environmental protection, social responsibility and human rights.





Arguments in support of recommendation 1.2









2.7.


The EESC, as the institutional representative of organised civil society, employers, and workers, is uniquely positioned to provide a balanced and multidimensional perspective on the implications of the ESRS standards. Consulting with the EESC would ensure that the simplification measures are not only technically sound but also socially and economically proportionate, reflecting the realities faced by companies and stakeholders on the ground.












2.8.


Moreover, involving the EESC in this process would contribute to greater transparency and inclusiveness and bring a stronger legitimacy to the review. Given the EESC’s advisory role under the Treaties and its established expertise in sustainability and corporate reporting matters, its input would enrich the process and help ensure that the revised standards remain consistent with the EU’s broader sustainability and competitiveness objectives.





Arguments in support of recommendation 1.3









2.9.


Timely advancement of the Omnibus proposal is crucial, as timely action will provide the legal certainty needed for businesses operating within the EU. Clear and predictable regulatory frameworks are essential for creating an environment conducive to investment and growth, particularly in the context of a rapidly evolving global economy. Nevertheless, it is crucial that the co-legislators take sufficient time to consult with stakeholders like companies, NGOs, trade unions and civil society, giving these consultations their due recognition as an essential element of the democratic process. While timely legislative action is important, the EESC calls on the co-legislators to prioritise the ex-ante application of Better Law-Making principles throughout the legislative process. The EESC stresses that the use of omnibus procedures should remain exceptional and must not undermine the standard legislative practices that ensure transparency, stakeholder consultation, and democratic legitimacy.












2.10.


It is also essential that any regulatory simplifications uphold the EU’s high standards on human rights, labour rights, women’s rights and environmental protections, safeguarding workers and communities within the EU and beyond. Every company – regardless of size, turnover or numbers of employees – has a general responsibility towards its workers and the environment.





Arguments in support of recommendation 1.4









2.11.


The CSRD serves as a key instrument in facilitating the green transition, enabling companies to measure, assess and articulate their sustainability initiatives while providing critical information for evaluating environmental and social risks. It is essential that its reporting obligations remain feasible, ensuring their effective implementation in business operations.












2.12.


SMEs need more assistance in complying with the CSRD reporting requirements in order to maintain their ability to innovate and actively participate in the broader green transition and to tackle the regulatory requirements, which can limit the flexibility and resources SMEs need to engage in sustainable practices and improve their capacity to grow to grow and compete in a global market (3). CSRD offers opportunities for SMEs, with the right support and guidance, to showcase their sustainable practices and thereby improve their capacity to grow and compete in a global market (4).





Arguments in support of recommendation 1.5









2.13.


In its opinion on the CS3D (5), the EESC stressed the need for clear and proportionate rules to ensure that companies could meet their due diligence obligations, and emphasised that Russia’s attack on Ukraine has reshaped global geopolitics, driving Europe to reduce dependencies in strategic sectors. In this regard, and taking into account the new rising trade tensions, the EESC calls for an approach that acknowledges these new challenges and provides businesses with the support and guidance they need to navigate this evolving environment.





Arguments in support of recommendation 1.6









2.14.


Achieving a harmonised due diligence framework is crucial for ensuring legal certainty and a level playing field across the EU. A uniform approach will not only reduce compliance costs but also strengthen corporate accountability and the EU’s sustainability objectives in a coherent and efficient manner – although harmonised definitions are still needed.












2.15.


A functioning due diligence process in companies follows a risk-based approach, ensuring that companies establish a risk-management system that should prevent systemic human and environmental rights breaches.





Arguments in support of recommendation 1.7









2.16.


The effectiveness of the CS3D hinges on ensuring that due diligence requirements remain practical, risk-focused, and aligned with the realities of complex global value chains. Companies, particularly those with extensive supply networks, need the flexibility to prioritise the most significant risks. By clarifying that in-depth assessments should be guided by companies’ own mapping and risk-based prioritisation, legislators can ensure that due diligence efforts remain targeted, proportionate and effective. Without this clarity, businesses could face impractical obligations that not only increase costs but also reduce the Directive’s overall impact by diluting attention from the most pressing risks.












2.17.


Additionally, the concept of ‘plausible information’ as a trigger for assessing indirect business partners introduces significant legal uncertainty, which would hinder effective implementation. Replacing ‘plausible information’ with clearer terminology – such as ‘relevant’, ‘factual’ and ‘verifiable’ – would align with established EU regulatory frameworks like the Forced Labour Regulation. Well-defined legal terminology would help businesses focus on credible risks while preventing an unmanageable increase in due diligence obligations, which could ultimately burden SMEs and distort supply chain relationships.












2.18.


The EESC believes consideration should be given to introducing a derogation for high-risk sectors. Member States are called upon to reflect on such a derogation for the purposes of mapping, which is provided for in paragraph 2 point (a). Companies do seek to obtain information from direct business partners with fewer than 500 employees that exceeds the information specified in the standards for voluntary use referred to in Article 29a of Directive 2013/34/EU (6).





Arguments in support of recommendation 1.8









2.19.


The EESC also expresses its concern about the removal of the provision allowing NGOs and trade unions to support victims in legal proceedings. While acknowledging the complexity of the legal framework, it underlines that civil society actors can provide valuable assistance to individuals who may otherwise face difficulties accessing justice.





Arguments in support of recommendation 1.9









2.20.


The proposed threshold may lead to competitive advantages for imported goods compared to EU-produced equivalents, which remain fully subject to ETS obligations and the gradual reduction of free allowances. This risk is particularly evident in sectors where individual finished products weighing less than 50 tonnes can be imported without CBAM costs, while EU producers face increasing carbon costs. To avoid such distortions, the exemption should be paired with compensatory mechanisms for companies and workers, such as maintaining full free allocation for comparable EU goods or modulating the threshold where necessary to prevent market imbalances.





Arguments in support of recommendations 1.10









2.21.


Default carbon price values help simplify compliance. However, if set too low, they weaken the CBAM’s effectiveness by allowing importers to pay artificially low costs compared to EU producers. This risks creating unfair cost advantages for third-country competitors and could undermine the mechanism’s objective of preventing carbon leakage. An annual review based on real-world carbon price data would ensure that the values remain accurate and fair, avoiding market distortions. Strengthening customs oversight on these deductions would further safeguard against manipulation of carbon cost declarations.




3.   PROPOSED AMENDMENTS TO THE LEGISLATIVE PROPOSAL OF THE EUROPEAN COMMISSION – COM(2025) 81 final – 2025/0045 (COD)


Amendment 1

Linked to recommendation 1.7
Add a new point (w) to Article 3(1) of Directive (EU) 2024/1760 (7)







Text proposed by the European Commission


EESC amendment




 










(w)






‘plausible information’ means objective, factual and verifiable information, as referred to in Regulation (EU) 2024/3015.











Reason

The concept of ‘plausible information’ as a trigger for assessing indirect business partners introduces significant legal uncertainty, which would hinder effective implementation. Replacing ‘plausible information’ with clearer terminology – such as ‘relevant’, ‘factual’ and ‘verifiable’ – would align with established EU regulatory frameworks like the Forced Labour Regulation. Well-defined legal terminology would help businesses focus on credible risks while preventing an unmanageable increase in due diligence obligations, which could ultimately burden SMEs and distort supply chain relationships.

Amendment 2

Linked to recommendation 1.7
Recital 21






Text proposed by the European Commission


EESC amendment










(21)


Article 5 of Directive (EU) 2024/1760 obliges Member States to ensure that large companies above a certain size conduct risk-based human rights and environmental due diligence. To reduce burdens on companies that have to comply with that obligation, the required due diligence should, as a general rule, be limited to the company’s own operations, those of its subsidiaries and those of its direct business partners (‘tier 1’). Consequently, when it comes to business relationships, companies should, after having mapped their chains of activities, be required to carry out in-depth assessments as regards direct business partners only. Companies should, however, look beyond their direct business relationships where they have plausible information that suggests an adverse impact at the level of an indirect business partner. Plausible information means 
information of an objective character that allows the company to conclude that there is a reasonable likelihood that the information is true
. This may be the case where the company concerned has received a complaint or is in the possession of information, for example through credible media or NGO reports, reports of recent incidents, or through recurring problems at certain locations about likely or actual harmful activities at the level of an indirect business partner. Where the company has such information, it should carry out an in-depth assessment. Companies should also carry out in-depth assessments with respect to adverse impacts arising beyond their direct business partner where the structure of this business relationship lacks economic rationale and suggests that it was chosen to remove an otherwise direct supplier with harmful activities from the purview of the company. Where the in-depth assessment confirms the likelihood or existence of the adverse impact, it should then be deemed to be identified. In addition, companies should seek to ensure that their code of conduct – which is part of their due diligence policy and sets out the expectations as to how to protect human, including labour, rights and the environment in business operations – is followed throughout the chain of activities in accordance with contractual cascading and SME support.












(21)


Article 5 of Directive (EU) 2024/1760 obliges Member States to ensure that large companies above a certain size conduct risk-based human rights and environmental due diligence. To reduce burdens on companies that have to comply with that obligation, the required due diligence should, as a general rule, be limited to the company’s own operations, those of its subsidiaries and those of its direct business partners (‘tier 1’). Consequently, when it comes to business relationships, companies should, after having mapped their chains of activities, be required to carry out in-depth assessments as regards direct business partners only. Companies should, however, look beyond their direct business relationships where they have plausible information that suggests an adverse impact at the level of an indirect business partner. Plausible information means 
objective, factual and verifiable information, as referred to in Regulation (EU) 2024/3015
. This may be the case where the company concerned has received a complaint or is in the possession of information, for example through credible media or NGO reports, reports of recent incidents, or through recurring problems at certain locations about likely or actual harmful activities at the level of an indirect business partner. Where the company has such information, it should carry out an in-depth assessment. Companies should also carry out in-depth assessments with respect to adverse impacts arising beyond their direct business partner where the structure of this business relationship lacks economic rationale and suggests that it was chosen to remove an otherwise direct supplier with harmful activities from the purview of the company. Where the in-depth assessment confirms the likelihood or existence of the adverse impact, it should then be deemed to be identified. In addition, companies should seek to ensure that their code of conduct – which is part of their due diligence policy and sets out the expectations as to how to protect human, including labour, rights and the environment in business operations – is followed throughout the chain of activities in accordance with contractual cascading and SME support.









Reason

The concept of ‘plausible information’ as a trigger for assessing indirect business partners introduces significant legal uncertainty, which would hinder effective implementation. Replacing ‘plausible information’ with clearer terminology – such as ‘relevant’, ‘factual’ and ‘verifiable’ – would align with established EU regulatory frameworks like the Forced Labour Regulation. Well-defined legal terminology would help businesses focus on credible risks while preventing an unmanageable increase in due diligence obligations, which could ultimately burden SMEs and distort supply chain relationships.

Amendment 3

Linked to recommendation 1.2
Recital 3






Text proposed by the European Commission


EESC amendment










(3)


Article 26a(1) of Directive 2006/43/EC requires Member States to ensure that statutory auditors and audit firms carry out the assurance of sustainability reporting in compliance with limited assurance standards to be adopted by the Commission. Article 26a(3) of that Directive requires the Commission to adopt those standards by 1 October 2026. Undertakings have raised concerns on the work carried out by the assurance providers and have expressed the need for flexibility in addressing specific risks and critical issues identified in the areas of sustainability assurance. To enable the Commission to take account of those concerns, it should be given more flexibility in adopting those standards. In any case, the Commission will issue targeted assurance guidelines by 2026 that clarify the necessary procedures that assurance providers are to perform as part of their limited assurance engagement before adopting the standards by delegated act.












(3)


Article 26a(1) of Directive 2006/43/EC requires Member States to ensure that statutory auditors and audit firms carry out the assurance of sustainability reporting in compliance with limited assurance standards to be adopted by the Commission. Article 26a(3) of that Directive requires the Commission to adopt those standards by 1 October 2026. Undertakings have raised concerns on the work carried out by the assurance providers and have expressed the need for flexibility in addressing specific risks and critical issues identified in the areas of sustainability assurance. To enable the Commission to take account of those concerns, it should be given more flexibility in adopting those standards. In any case, the Commission will issue targeted assurance guidelines by 2026 that clarify the necessary procedures that assurance providers are to perform as part of their limited assurance engagement before adopting the standards by delegated act.








 




In the context of the Commission’s commitment to undertake a review of the European Sustainability Reporting Standards (ESRS), it is essential to ensure a fair and inclusive consultation process involving all relevant stakeholders and institutions, including the European Economic and Social Committee, which, as a representative body of organised civil society, employers, and workers, is well-placed to contribute constructively to simplification efforts by providing balanced and evidence-based input.







Reason

The EESC, as the institutional representative of organised civil society, employers, and workers, is uniquely positioned to provide a balanced and multidimensional perspective on the implications of the ESRS standards. Consulting the EESC would ensure that the simplification measures are not only technically sound but also socially and economically proportionate, reflecting the realities faced by companies and stakeholders on the ground.


Brussels, 18 June 2025.


The President


of the European Economic and Social Committee

Oliver RÖPKE
               





(1)  
            Mario Draghi, The Future of European Competitiveness: In-depth Analysis and Recommendations, p. 318.

(2)  
            Mario Draghi, The Future of European Competitiveness: In-depth Analysis and Recommendations, p. 110.

(3)  
            European parliament, The impact of EU legislation in the area of digital and green transition, particularly on SMEs
.

(4)  
            European parliament, The impact of EU legislation in the area of digital and green transition, particularly on SMEs
.

(5)  Opinion of the European Economic and Social Committee on the proposal for a Directive of the European Parliament and of the Council on Corporate Sustainability, Due Diligence and amending Directive (EU) 2019/1937 (COM(2022) 71 final) (
OJ C 443, 22.11.2022, p. 81).

(6)  Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (OJ L 182, 29.6.2013, p. 19).

(7)  Directive (EU) 2024/1760 of the European Parliament and of the Council of 13 June 2024 on corporate sustainability due diligence and amending Directive (EU) 2019/1937 and Regulation (EU) 2023/2859 (OJ L, 2024/1760, 5.7.2024, ELI: http://data.europa.eu/eli/dir/2024/1760/oj).


ELI: http://data.europa.eu/eli/C/2025/4212/oj
ISSN 1977-091X (electronic edition)