EU Lawmakers Push for Softer Corporate Sustainability Rules

European Union lawmakers have endorsed reductions to corporate sustainability regulations following pressure from businesses and some governments. The recently updated directive compels businesses to rectify human rights and environmental issues in supply chains, with potential fines. The ruling reduces obligations on companies regarding climate change action plans.

On Thursday, European Union lawmakers voted in favor of reducing corporate sustainability requirements, yielding to prolonged demands from both companies and some governments urging the EU to weaken its stringent laws.

Originally adopted last year, the corporate sustainability due diligence directive mandates firms to tackle human and environmental violations within their supply chains or face fines reaching up to 5% of global turnover. This directive has ignited political controversy, with nations such as the United States and Qatar warning that these rules could disrupt gas supplies to Europe.

The recent vote specifies that only enterprises with over 5,000 employees and a turnover of 1.5 billion euros will need to adhere, excluding requirements for public climate change commitment plans. However, EU Parliament members must still negotiate the final directive with government officials.

(With inputs from agencies.)