Persistent business-related human rights abuses demonstrate evident shortcomings of voluntary frameworks. Binding due diligence rules are needed, but they will only be meaningful if they reflect the perspectives of rights-holders. Swedwatch works to ensure their inclusion in EU and international legislation.

From voluntary to mandatory rules 

As the global economy has become more interconnected, human rights violations, worker exploitation and environmental degradation have intensified across value chains. To address these issues, human rights and environment due diligence frameworks have emerged to hold both states and companies accountable for preventing harm and fostering sustainable business conduct. 

Initial efforts, such as the UN Guiding Principles (2011) and OECD Guidelines for Multinational Enterprises (2013), were voluntary and aimed to set global standards. However, persistent abuses have revealed limitations of voluntary frameworks, prompting the need for binding rules. 

Policy developments at the EU-level

In June 2024, the EU adopted the Corporate Sustainability Due Diligence Directive (CSDDD) – the first regional law of its kind. It requires large companies to identify, address and remedy adverse impacts, meaningfully engage stakeholders, and adopt climate transition plans aligned with the Paris Agreement. The directive also introduces an EU-wide civil liability mechanism to improve access to justice and remedy. Despite its significance, it has limitations, including high thresholds for company coverage, the exclusion of the financial sector, and limited downstream due diligence. 

Still, the CSDDD has spurred international momentum, with countries like Canada, Brazil, South Korea and the UK moving toward similar legislation. 

EU’s shifting priorities: deregulation over sustainability

Since the latest EU elections, priorities have shifted dramatically. The focus has moved from the Green Deal, sustainable development, climate action, and economic resilience within planetary boundaries, to a short-sighted agenda centred on competitiveness and regulatory simplification. Driven by the Draghi report and concerns over Europe’s global competitiveness and geopolitical role, simplification is increasingly framed as the solution, in practice severely undermining human rights and environmental protections.

In February 2025, the Commission introduced the Omnibus I propsal, suggesting amendments to core sustainability laws such as the CSDDD, the Corporate Sustainability Reporting Directive (CSRD), the Carbon Border Adjustment Mechanism (CBAM), and the EU Taxonomy Regulation. The proposal has been widely criticised by human rights experts, civil society organisations (including Swedwatch), trade unions, investors, and businesses, warning that the proposal risks weakening existing protections under the guise of competitiveness and simplification. (Below is a selection of statements opposing the Omnibus proposal.)

Swedwatch sees this as a deliberate attempt to roll back progress. The legislative process will continue into autumn 2025, with trilogue negotiations expected by the end of this year. It remains to be seen what will remain of the initial CSDDD.

Mandatory HREDD is essential to tackle ongoing human rights and environmental abuses, and in today’s uncertain times, the EU must show leadership by upholding the CSDDD to protect workers, communities and the environment.