The EU Must Hold Firm on Corporate Accountability and Children’s Rights

The European Union’s Corporate Sustainability Due Diligence Directive (CSDDD) and Corporate Sustainability Reporting Directive (CSRD) represent crucial steps toward ensuring responsible business practices that protect human rights, environmental sustainability, and long-term economic resilience. But are these gains now under threat from the Omnibus Simplification Package?

As companies and industry associations supporting these directives have noted, the CSRD and CSDDD regulations create a more predictable and level playing field, rewarding those that invest in ethical business conduct. Yet, the recently proposed Omnibus Simplification Package threatens to undo this progress under the guise of simplification and competitiveness.

While reducing bureaucratic redundancies can be a sensible goal, the reality of the Omnibus proposal is far more troubling—it risks hollowing out corporate accountability and reporting on crucial sustainability and human rights concerns, including their impact on children.

The danger of oversimplification

The push for ‘simplifying’ reporting requirements is, in reality, a shift toward deregulation that risks exempting businesses from properly assessing their impact on vulnerable groups—particularly children.

A key concern is the potential abandonment of double materiality, a cornerstone of both the CSRD and CSDDD, which ensures companies assess not just financial risks but also their broader societal impact.

Focusing solely on financial materiality would make it harder to account for business impacts on children beyond child labour, such as harmful digital models, misleading marketing, or environmental harm—risks that may not show up in financial statements but profoundly affect children’s rights.

Removing this broader impact lens weakens corporate due diligence, reducing accountability and leaving key risks unaddressed.

For businesses, long-term sustainability depends on maintaining a strong license to operate, which requires recognising and managing societal risks. Oversimplifying reporting threatens to sideline these responsibilities—at the expense of the most vulnerable.

A risk to children’s rights

Reducing due diligence and reporting obligations would have a direct impact on children, as it weakens businesses’ responsibilities to assess and mitigate harm.

We have seen what happens when corporate impunity goes unchecked—from child labour in supply chains to unsafe digital platforms that fail to protect young users. If companies are not required to report on these risks in a meaningful and transparent way, there will be little incentive for them to prioritise children’s rights in their business decisions.

The EU has made clear commitments to human rights and child protection, including in the context of digital safety, environmental justice, and ethical labour practices. Diluting corporate accountability laws contradicts these commitments.

Rather than rolling back these protections, the Commission should focus on clear implementation guidance that helps businesses integrate these frameworks effectively while ensuring that children’s rights remain central to corporate sustainability strategies.

A crucial resource in this effort is the Corporate Playbook: Embedding Children’s Rights into ESRS Reporting. This guide provides companies with practical strategies for integrating children’s rights into their sustainability reporting, ensuring that businesses acknowledge and act on their responsibilities to young people.

By following these guidelines, companies can not only comply with EU regulations but also lead in responsible business conduct, demonstrating their commitment to a future where children’s rights are protected and prioritised.

A need for decisive action

While businesses require clarity and predictability in compliance, this should not come at the expense of corporate accountability. The Commission must ensure that any amendments to existing legislation strengthen, rather than weaken, sustainability and human rights protections.

As the European Commission prepares to publish its Omnibus Simplification Package, pressure is mounting to protect the integrity of the EU’s sustainability due diligence framework.

A coalition of major business associations—representing over 6,000 companies—has urged the EU to preserve the core principles of the CSRD and CSDDD.

Governments have also weighed in, with Spain voicing strong support for maintaining these standards. Additionally, the Cocoa Coalition has also urged the European Commission to not modify any elements of the CSDDD, nor to reopen it for renegotiation, but to focus on the preparations as required in the CSDDD.

Global experts, including the UN Working Group on Business & Human Rights, 75 organisations from the Global South, and 25 legal academics, have warned against reopening the legal text of the CSDDD, citing risks to corporate accountability and legal certainty. The Global Reporting Initiative (GRI) has also stressed the importance of double materiality.

With growing concern that the Omnibus proposal could dilute sustainability obligations under the guise of simplification, the EU must stay the course—ensuring that corporate responsibility remains robust, transparent, and enforceable.

Leaders must stay the course

Children’s rights are not a bureaucratic burden; they are a fundamental responsibility, and simplified reporting should not mean an escape from accountability.

Rather than attempting to dilute the CSDDD and CSRD under the pretense of simplification, the EU should hold to its commitments and instead reinforce the importance of corporate responsibility for all stakeholders, especially the most vulnerable.

Now is the time for European leaders to stand firm against corporate pressure and uphold the progress made in business and human rights. The future of sustainable and responsible business—one that truly serves people and the planet—depends on it.