Thursday 13 November was a “very sad day” for the left-wing and liberal parties in the European Parliament. For MEP Jörgen Warborn (EPP, Swedish), however, this is a “very good day for business”. Mr Warborn is rapporteur for the ‘omnibus’ legislation on the simplification of the directives on corporate sustainability due diligence (CSDDD) and reporting (CSRD). On Thursday 13 November, his amendments deleting a large part of the obligations in these texts were adopted thanks to a majority comprising his group and the PfE, ECR and ESN. The amended report was approved by 382 votes in favour, 249 against and 13 abstentions.
According to Mr Warborn, the position now taken by Parliament is “reasonable” in substance. The changes voted through by MEPs go even further than the Council’s position when it comes to simplifying the rules for businesses, in particular the CSDDD on corporate due diligence.
Climate transition plans, which were compulsory in the text, are no longer compulsory in Parliament’s report. In other words, companies with more than 5,000 employees and a turnover of more than €1.5 billion would no longer need to draw up a climate transition plan if they do not wish to do so.
A month earlier, the compromise reached at the centre and approved by the Committee on Legal Affairs maintained this obligation, while mitigating the duty to implement this plan (see EUROPE 13729/18).
Scope. In the end, the rapporteur decided to further reduce the scope of companies covered by the CSRD directive compared to the Council’s position, with which he was previously aligned.
From now on, only companies with more than 1,750 employees and sales of more than €450 million will have to comply. The compromise with the left-wing groups, like the Council’s position, stopped at 1,000 employees.
The thresholds remain the same for the Due Diligence Directive: 5,000 employees and sales of €1.5 billion. In recent days, S&D, Renew Europe and Greens/EFA negotiators have failed to negotiate an agreement that would lower these thresholds (see EUROPE 13746/19).
Due diligence. In keeping with efforts to ease the burden on businesses, the obligations to prevent negative impacts on the environment and social rights in the value chain have been made more flexible. For example, efforts can be concentrated where the risks are greatest, and companies will be able to rely on information that is already available, without having to make detailed enquiries of their commercial partners.
The rapporteur also received a majority of votes in favour of removing approximate amounts for fines. The compromise reached at the centre set a maximum mandatory threshold of 5% of turnover, so that Member States would not have been able to transpose a lower percentage into their law.
This clarification has been removed so that each country can set the fines it wishes, according to the text adopted by Parliament.
The fruit of the alliance between the EPP and the far right is “nothing but a further diluted version of a once-ambitious sustainability agenda”, lamented S&D negotiator René Repasi (German).
Civil liability. As expected, civil liability at European level has been abolished. Contrary to the compromise reached in October, the text adopted on Thursday does not include a revision clause on this issue.
According to Pascal Canfin MEP (Renew Europe, French), these changes make the CSDDD meaningless.
The right-wing/far-right alliance becomes a reality. According to a parliamentary source, the vote on Thursday 13 November demonstrated something that some left-wing groups had previously thought impossible. The cordon sanitaire applied to keep the PfE, ECR and ENS groups out of the negotiations had already been broken on votes on resolutions, but also on the amendment of the regulation against imported deforestation (see EUROPE 13524/1) last year. But the case of the ‘omnibus’ goes further, because the vote concerns several dozen amendments, and it was widely anticipated.
Questioned by Agence Europe after the vote, the co-president of the Greens/EFA, Bas Eickhout (Dutch), said that the EPP was playing “a dangerous game”.
For his Belgian colleague of Renew Europe Sophie Wilmès, “the EPP is taking a further step in its denial of its fundamentals by sending to the trilogue, for the very first time, a text born of an open and unapologetic alliance with the far right”.
Broadly speaking, the S&D, Renew Europe and Greens/EFA groups believe that the EPP must explain itself and return to the centre. They regret that the rapporteur has not followed up on their efforts over the last few days to find a compromise at the centre (see EUROPE 13746/19).
Jörgen Warborn defended himself against these attacks. “I tried to have a deal with the platform, it didn’t work out”. Asked by Agence Europe about the future of the so-called ‘pro-European’ majority in the centre, he pointed out that discussions were continuing between these groups on other issues. “Where you can’t find a majority, you need to find a majority. That is what happened today”, he explained.
Conservative MEP Tobiasz Adam Bocheński (ECR, Polish) welcomed the new dynamic: “The adoption of these simplification measures shows that a new realism is emerging in this house”. (Original version in French by Léa Marchal)