European industry calls for repeal of EU sustainability due diligence law

A coalition of prominent European companies, led by TotalEnergies and Siemens, is urging the European Union to withdraw the Corporate Sustainability Due Diligence Directive (CSDDD or CSD3). According to the group, the rules create disproportionate administrative burdens, hinder business expansion, and weaken Europe’s position in global competition. In a joint letter reportedly addressed to EU policymakers, the companies argue that revoking the directive would signal a renewed commitment to strengthening industrial competitiveness. The appeal reflects growing dissatisfaction within the business community over the EU’s increasingly complex sustainability and reporting requirements.

The CSDDDD, adopted in 2024, obliges large enterprises to identify, prevent, and address environmental and human rights risks throughout their supply chains. Non-compliance can result in financial penalties of up to 5% of global turnover. The directive forms part of a broader EU framework on climate responsibility and sustainable business practices, alongside measures such as the Corporate Sustainability Reporting Directive and the Carbon Border Adjustment Mechanism. Collectively, these initiatives aim to advance climate accountability across European economic activity and supply chains.

The call for repeal has provoked strong criticism from environmental NGOs, trade unions, and human rights advocates, who warn that dismantling the framework would significantly weaken corporate accountability and damage the EU’s credibility as a leader in sustainability. While scrapping the directive could provide short-term relief for major corporations by lowering compliance costs, it may also unsettle investors and sustainability-focused funds. A rollback could be perceived as a retreat from robust environmental governance, potentially influencing investment decisions, particularly in policy-sensitive sectors such as energy, manufacturing, and raw materials.

EU institutions are now examining potential revisions aimed at simplifying the rules. Policymakers must navigate the difficult balance between supporting near-term industrial competitiveness and safeguarding long-term sustainability objectives.