What’s Next for EU Corporate Sustainability? 3 Key Takeaways from Our Omnibus Proposal Webinar
Tomas Novotny
Solutions Expert
1 Aug 2025
About 4 mins
The EU’s proposed changes to corporate sustainability frameworks are creating significant uncertainty for businesses across Europe. To help supply chain leaders navigate these developments, Sedex recently hosted a webinar examining the EU Omnibus Proposal and its potential impact on the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDD).
Our expert panel brought together:
- Richard Howitt, Strategic Advisor on Corporate Responsibility and Sustainability and former MEP
- Ben Leblique, Senior Policy Specialist at PRI
- Charlotte Kincaid, Senior ESG Policy Manager, Sedex
The discussion revealed three critical insights that every supply chain professional should understand.
1. The “simplification” paradox: Why proposed changes may increase complexity
While the EU omnibus proposal promises regulatory simplification, our analysis suggests it may achieve the opposite. The proposed scaling back of CSRD and CSDD obligation, including exemptions for smaller companies and reduced reporting scope, risks creating a more fragmented regulatory landscape.
“The idea of sustainability as a cost and not an investment is just plain wrong,” warned Richard Howitt during the session.
Rather than streamlining compliance, these changes could lead to:
- A proliferation of voluntary frameworks with inconsistent standards
- Increased administrative burden for companies managing multiple reporting requirements
- Greater complexity for investors seeking comparable ESG data across portfolios
For supply chain leaders, this fragmentation means maintaining robust due diligence processes becomes more critical, not less, as regulatory clarity diminishes.
2. Narrowing due diligence scope undermines supply chain transparency
Perhaps the most concerning proposed change is limiting corporate due diligence requirements to tier one suppliers only. This represents a significant step backwards from the risk-based approach advocated by the UN Guiding Principles on Business and Human Rights.
“Shifting the burden from companies to investors and civil society is not simplification—it’s abdication,” noted Ben Leblique.
The implications for supply chain management are substantial:
- Reduced visibility into deeper supply chain risks where many critical issues occur
- Competitive disadvantage for companies already conducting comprehensive multi-tier due diligence
- Increased compliance risks as supply chain transparency requirements from other jurisdictions continue to expand
This narrow approach contradicts the reality that supply chain risks, from forced labour to environmental damage, often occur beyond the first tier of suppliers.
3. Political drivers overriding evidence-based policy
The webinar highlighted a troubling trend: recent political shifts in the European Parliament are driving regulatory changes without adequate consultation or impact assessment. These developments reflect political positioning rather than evidence-based policy development.
“The only difference was politics—not economics,” Richard Howitt observed, pointing to the alignment between centre-right and far-right factions in the EU Parliament.
Policy making without due process raises several concerns:
- Lack of stakeholder consultation in developing significant regulatory changes
- Absence of proper impact assessments to understand business and societal consequences
- Risk to EU leadership in global corporate sustainability standards
Strategic recommendations for supply chain leaders
Despite regulatory uncertainty, our panel was clear: this is not the time to pause sustainability efforts. Instead, supply chain professionals should:
Maintain robust due diligence processes: Continue building comprehensive risk assessment capabilities across your supply chain, regardless of changing minimum requirements.
Engage with policymakers: Actively participate in consultations and advocacy efforts to ensure evidence-based policy development.
Strengthen stakeholder communication: Use this period to improve transparency and reporting practices that will serve your organisation regardless of regulatory outcomes.
Invest in technology and partnerships: Leverage platforms like Sedex to maintain visibility across multi-tier supply chains and demonstrate ongoing commitment to responsible sourcing.
“We’ve got to be the people that say: no—we’re going to use the time productively,” emphasised Richard Howitt.
The path forward: Maintaining momentum despite uncertainty
While the EU omnibus proposal creates short-term uncertainty, the long-term trajectory towards greater supply chain transparency and accountability remains clear. Organisations that continue investing in robust due diligence capabilities will be better positioned to meet future requirements and stakeholder expectations.
For supply chain leaders, this means focusing on:
- Site-level risk assessment across all tiers of your supply chain
- Verified data collection through recognised standards and audit processes
- Stakeholder engagement that demonstrates ongoing commitment to sustainability
- Technology adoption that enables scalable due diligence across complex supply networks
Ready to strengthen your supply chain due diligence capabilities?
Sedex helps organisations navigate regulatory uncertainty while building resilient, transparent supply chains. Our platform provides the tools and expertise needed to maintain comprehensive due diligence regardless of changing requirements.
Contact our team to discuss how we can support your organisation’s sustainability journey.
