Europe and the Limits of Corporate Human Rights Law

Author: Emma Nelson

May 7, 2026

European Parliament in Brussels [Image credit: Wikimedia Commons]

Corporations are deeply embedded in the global economic systems that shape labor conditions and resource extraction worldwide, but what counts as a corporate human rights obligation has long been contested. For years, the international standards governing business conduct have relied on voluntary guidelines and reputational pressure rather than binding legal requirements. In June 2024, however, the European Union appeared to move beyond this model when it formally adopted the Corporate Sustainability Due Diligence Directive (CS3D). This law was designed to hold large companies operating in the EU accountable for human rights abuses and environmental harms occurring throughout their global supply chains. Companies operating in the EU’s single market were required to identify, prevent, and address human rights violations not only within their own operations but across their broader suppliers and contractors abroad. Firms could also face potential civil liability if they failed to prevent harms linked to their business relationships. This meant that abuses occurring in garment factories in Bangladesh, cobalt mines in the DRC, or agricultural plantations supplying European markets could theoretically be challenged in European courts. After decades in which corporate responsibility for such abuses had been treated primarily as a voluntary commitment, the directive signaled a shift toward legal accountability. 

Less than a year later, however, that ambition began to unravel. In early 2025, the European Commission introduced the Omnibus I Package, a set of amendments framed as an effort to simplify corporate regulation and strengthen European competitiveness. These changes rolled back key provisions of the directive. Requirements related to climate transition plans and the civil liability regime were removed at the EU level, while the implementation timeline was pushed back several years. Further, the thresholds determining which companies fall within the law’s scope were raised dramatically, limiting coverage to firms with more than 5,000 employees and €1.5 billion in global turnover. As a result, the number of companies subject to the directive dropped by roughly 70%. In December 2025, the European Parliament approved these changes, with the center-right European People’s Party (EPP), which holds the largest bloc of seats in Parliament, securing the necessary majority by aligning with the far-right European Conservatives and Reformists (ECR) and Identity and Democracy (ID) groups.

Even before the amendments were approved, the directive had come under sustained political pressure. Major European business groups had lobbied aggressively against the directive after its introduction, arguing that compliance requirements would impose excessive costs on companies already navigating economic uncertainty. Some national governments echoed those concerns. French President Emmanuel Macron, for example, publicly called for the directive to be reconsidered, and Germany’s new governing coalition pledged to repeal its national supply chain law, signalling broader resistance to the EU directive. The directive was increasingly framed as a threat to competitiveness rather than a tool for protecting workers and communities. Yet, the introduction of these amendments prompted sharp criticism from civil society organizations, with the European Coalition for Corporate Justice describing the legislation as “full-scale deregulation designed to dismantle corporate accountability.”

These developments highlight a deeper problem within the global system governing corporate conduct. For more than a decade, the dominant international framework addressing corporate responsibility toward human rights has been the United Nations Guiding Principles on Business and Human Rights (UNGPs), introduced in 2011. The UNGPs established three core pillars: the duty of states to protect human rights, the responsibility of companies to respect them, and the need for victims of abuse to access remedies. While the framework is widely endorsed by governments and corporations, it relies largely on voluntary compliance. Companies are encouraged to identify, map, and target human rights risks within their operations and supply chains, but there is no binding enforcement mechanism.

The EU’s due diligence directive was intended to fill this gap by translating those voluntary expectations into legal obligations. Yet, even before the Omnibus amendments, the directive reflected a fundamental tension in how corporate accountability is approached. Under the law, companies are required to demonstrate that they have taken “appropriate measures” to identify and address risks within their supply chains, but not to guarantee that abuses will not occur. It is frequently treated as a form of risk management for the business itself, as companies conduct audits, produce reports, or hire consultants to monitor supply chains, while the underlying conditions faced by workers remain unchanged. Researchers examining similar legislation in Europe found limited evidence that such frameworks effectively reduce corporate abuses. France’s Duty of Vigilance law, for example, adopted in 2017, has produced only a few court rulings since coming into force several years ago. Germany’s supply chain legislation, enacted in 2023, has yet to result in a successful legal case against a company.

Despite these shortcomings, public support for stronger corporate accountability remains significant. A poll commissioned by Amnesty International and Global Witness in 2025 found that a majority of respondents across ten European countries supported legislation requiring large companies to address human rights abuses throughout their supply chains. Approximately three-quarters agreed that corporations should be held accountable for harms linked to their global operations. Even within the business community, some major firms, including Deutsche Bank and Allianz, have expressed support for consistent regulatory standards, arguing that clear rules create stability for both investors and companies. What remains of the CS3D after the Omnibus amendments is therefore not insignificant. Large companies operating in the EU will still be required to conduct due diligence on human rights risks within their supply chains. Victims of corporate abuses may still be able to pursue legal claims in European courts under certain circumstances. These provisions represent an acknowledgment that corporations operating across borders cannot remain entirely insulated from the consequences of their actions.

At the same time, the directive illustrates the limits of relying on corporate compliance systems to address global human rights abuses. Modern supply chains span dozens of countries, often in regions where regulation is weak, and workers have few legal protections, making meaningful oversight difficult. While mandatory due diligence laws such as the CS3D represent one of the few tools that governments have to regulate multinational corporations, their effectiveness depends on strong enforcement. When rules are diluted through political compromise or corporate lobbying, the gap between legal commitments and the realities faced by workers widens. In practice, therefore, the impact of the directive will depend less on its existence than on the extent to which European governments choose to enforce it.

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Glossary

• Competitiveness – A country or region's ability to sustain economic growth and attract investment

• Corporate Sustainability Due Diligence Directive (CS3D) – EU legislation requiring large companies to identify and address human rights and environmental harms across their global supply chains

• DRC – Democratic Republic of the Congo

• European Coalition for Corporate Justice – A Brussels-based civil society network campaigning for stronger legal accountability for corporations

• European Commission – The EU's executive body, responsible for proposing legislation and managing the bloc's affairs

• European Conservatives and Reformists (ECR) – A far-right political group in the European Parliament opposed to deeper European integration

• European Parliament – The EU's directly elected legislative body, representing citizens across all 27 member states

• European People’s Party (EPP) – The largest and historically most centrist political group in the European Parliament

• European Union – A political and economic union of 27 European member states operating a single market

• France’s Duty of Vigilance law – A 2017 French law requiring large companies to address human rights risks in their supply chains; the first of its kind in Europe

• Identity and Democracy (ID) – A far-right, nationalist political group in the European Parliament

• Omnibus I Package – A 2025 set of EU amendments that significantly weakened the CS3D by narrowing its scope and delaying implementation

• United Nations Guiding Principles on Business and Human Rights (UNGPs) – A 2011 international framework establishing voluntary human rights responsibilities for corporations, with no binding enforcement mechanism