In this week’s edition of the Debrief, multiple developments concerning due diligence legislation in the EU will be highlighted. The Commission has published the revised sustainability reporting standards (ESRS) for companies in scope of the CSRD. It has also launched its EUFLR Preparedness Package, which encompasses the EU Forced Labour Single Portal with a range of resources to clarify and support implementation by companies. In Germany, the government expressed its intention to reduce the scope of companies covered by the German Supply Chain Act by 95% to align with the CSDDD, a move criticised by civil society actors.
In addition, a Court in France has confirmed that companies must include Scope 3 GHG emissions in their vigilance plans under the Loi de Vigilance, in a ruling against Total Energies. In relation to the EU Deforestation Regulation, indications suggest that the Delegated Act amending the scope of products covered by the EUDR is likely to exclude leather products, while potentially adding further coffee and palm oil-related products.
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Due Diligence Legislation
Updates:
The EU Commission has adopted the revised sustainability reporting standards under the CSRD.
The adoption encompasses a revised set of the European Sustainability Reporting Standards (ESRS) according to which companies in scope of the CSRD are required to report. According to the Commission, the revision reduces the number of mandatory data points by more than 60% and the overall number of data points by more than 70%.
For most topics covered by the ESRS, the reductions made concern the level of detail for disclosures rather than disclosures themselves. For instance, the disclosure of policies managing impacts, risks and opportunities related to a company’s own workforce required companies to explain how ILO, OECD and other soft law instruments were reflected, and whether they had policies on human trafficking, forced labour, child labour and different forms of discrimination in place (S1-1, paras.17-24). Under the revised ESRS, only policies related to human trafficking, forced labour and child labour are requested in addition to information on policies more generally (S1-1, paras. 10-11).
In addition, the Commission has adopted a Delegated Act to regulate the reporting of data for companies that fall outside the scope of the CSRD. The Delegated Act establishes the sustainability standard for voluntary use (‘Voluntary Standard’) which is protected by a value chain cap of 1000 employees. This gives companies outside the CSRD scope the option to report voluntarily according to a standardised and simplified framework and prevents companies in scope of the Directive to request information in excess of the Voluntary Standard.
A Court in Paris has ordered TotalEnergies to disclose risks in relation to its Scope 3 emissions and to set out measures to address them.
The case was brought by a coalition of NGOs, including Notre Affaire à Tous, Sherpa and France Nature Environnement, and the City of Paris. The claimants alleged that TotalEnergies had failed to comply with the French Duty of Vigilance Law. They asked the court to order the company to update its vigilance plan to include its Scope 3 GHG emissions in its assessment of risks and adoption of measures to address them.
While the company had argued that environmental risks under the law did not include global warming, the Court confirmed that under the Loi de Vigilance, TotalEnergies must include all GHG emissions, including Scope 3 emissions, in its risk assessment and develop measures to address them. The ruling has been described as a landmark decision in France, as it is the first time a French court has required a major oil and gas company to account for Scope 3 emissions under the Duty of Vigilance Law. The Court declined however, to order TotalEnergies to halt any new fossil fuel projects or to impose specific emission-reduction measures, holding that it could not substitute itself for the company in determining the measures to be implemented
The German government has announced its intention to weaken the German Supply Chain Act as part of the Implementation of the CSDDD.
In its reform package, the Social Democrats (SPD) and the Conservatives (CDU) coalition government agreed to reduce the scope of the legislation to align it with that of the CSDDD upon its implementation. This would reduce the number of companies subject to (direct) due diligence obligations under the law by 95%, marking a significant narrowing of the law’s scope. Civil society actors have criticised this move, while legal experts have warned that weakening the protection of human rights may constitute an infringement of European and International Law.
Notes/Further Reading:
The manual provides a detailed guide international crimes that harm or involve the unlawful appropriation of parts of the natural environment. It is intended for practitioners, investigators and civil society actors and aims to support users in identifying, framing and investigating such crimes. The manual focuses on war crimes, i.e., environmental degradation in conflict and crimes against humanity, encompassing both in war and peacetime. The publication draws on lessons learned from practitioners and experts in the context of Russia’s invasion of Ukraine.
Deforestation Legislation
Updates:
Reports indicate that leather will be excluded from the scope of the EUDR, while palm-derived chemicals will be included.
A leaked draft delegated act and annex to the EUDR obtained by Euractiv indicate that leather will be removed from the list of products covered by the Regulation, confirming earlier proposals from the Commission to that effect. Civil society actors have repeatedly warned against the move citing the sector’s contribution to deforestation, while the Commission’s own consultants have identified leather as a driver of deforestation. The leaked draft reportedly cites supply chain considerations and the burden on the EUDR Information System as reasons for the exclusion.
Another key change to the scope of the regulation is the anticipated addition of soluble coffee and an expansion to cover a wide range of palm-derived chemicals with the aim of ensuring consistency across oleochemical supply chains. The draft also proposes delaying the application of the obligations to the newly added products until 30 December 2027, to give businesses sufficient time to implement the necessary measures.
The Regulation has been watered down and delayed twice since its adoption in 2023 and will enter into force on 30 December 2026. The most recent delay, agreed in late 2025, was attributed to significant problems with the EU’s IT system, TRACES, through which operators will be required to register relevant information concerning their products. The investigation suggests, however, that the EU officials had been aware of the IT issues for some time, raising questions as to why the Commission did not address them earlier. These findings are particularly relevant given that the Regulation has subject to repeated lobbying by industry actors and governments in recent years.
Forced Labour Legislation
Updates:
The EU Commission has launched its EUFLR Preparedness Package and Single Portal to support companies in the implementation of the EU Forced Labour Regulation.
The Portal established by the EU Commission gives access to information material about the background of the Regulation, different forms of forced labour, the Regulation implementation guidelines and other resources such as training materials for different stakeholders. It also provides access to the Product Risk Assessment Tool stakeholders can use once it has gone live.
As part of the preparedness package, the Commission has also published its Guidelines on the application of the Regulation. The document explains different aspects of the EUFLR, including the investigation process competent authorities may undertake to establish whether a product has been made with forced labour. In addition, the document provides guidance on how companies should undertake due diligence to prevent products or parts of products made with forced labour from entering their supply chains. It clarifies that due diligence obligations are closely related to companies’ responsibilities under the CSDDD and OECD Guidelines and offers recommendations on how existing due diligence processes can be adapted to forced labour contexts.
Further Readings:
A new report released by Globalworks highlights the extent of forced labour risks in China’s solar panel sector.
The due diligence analysis of solar supply chains in China found that state-imposed forced labour (SIFL) linked to poverty alleviation programmes and targeting ethnic minorities remains endemic to the sector. It demonstrates that risks prevail upstream, where the production of critical photovoltaic inputs is concentrated in China’s Xinjiang province and linked to the exploitation of ethnic minorities. However, the report also highlights risks in connection with poverty alleviation programmes, forced transfers and other factors. Overall, it found that many of the leading companies in the sector face high risks of exposure to SIFL, underlining the endemic nature of the risk across the sector.
Disclaimer: This newsletter is for general informational purposes only. It does not, and is not intended to, constitute legal advice.