The European Parliament’s Legal Affairs Committee has approved the European Commission’s Omnibus I proposal. This decision significantly weakens the corporate obligations under the Corporate Sustainability Due Diligence Directive (CSDDD), also known as the ‘anti-look away law’.
The key change concerns raising the thresholds. In the future, only companies with more than 5,000 employees and an annual turnover of at least 1.5 billion euros will be subject to the directive. Previously the limit was 1,000 employees and 450 million euros in sales. This means that many small and medium-sized companies are exempt from the requirements.
In addition, the scope of the due diligence obligations is reduced. Companies that continue to be covered by the directive no longer have to examine risks of maladministration along the entire supply chain, but only with their direct suppliers.
This means a significant relaxation for the fashion industry. In many cases, compliance with the directive becomes a voluntary measure. In particular, social sustainability aspects could become less important in corporate prioritization.
Angry reactions
Human rights organizations have reacted with outrage to the legal committee’s decision, particularly given the long road ahead to introduce the so-called ‘anti-look away law’. Fairtrade International described the decision on the career network LinkedIn as a missed opportunity for the European Parliament to send a clear and ambitious signal for corporate responsibility. “Fairtrade is very concerned that the EU is moving in the opposite direction as countries around the world tighten due diligence requirements,” the organization said.
The Clean Clothes Campaign also expressed sharp criticism. In a press release, she quoted her lobby and advocacy coordinator Giuseppe Cioffo as saying: “Today, MEPs betrayed garment workers worldwide. This could have been a breakthrough for workers living on poverty wages and denied their basic rights. Instead, it could now become a tool for brands to defend their rights “to ‘cleanse’ practices.”
European Commission wants to “simplify” sustainability
The Omnibus I proposal is part of a broader initiative by the European Commission. The aim is to simplify European sustainability legislation and reduce the bureaucratic burden on companies. The proposal was submitted on February 26, 2025 and affects both the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). While the CSRD requires companies to report on their impact on people and the environment, the CSDDD requires them to take active action against abuses in their value chain.
The Omnibus I proposal is intended to defuse these regulations and make them more coordinated with one another. On October 13, 2025, a majority in the European Parliament’s Legal Affairs Committee approved the proposal.
The final plenary vote in Parliament is due this month. If Parliament agrees, trilogue negotiations between Parliament, Council and Commission will follow. The member states will also have a say in the final legal text. This means that social sustainability in the fashion industry is once again at risk of becoming a voluntary decision – and no longer a legally anchored obligation.
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