The European Union’s decision to dilute its corporate sustainability rules could hurt the bloc’s efforts to fight climate change and risks rewarding companies with a poor track record, environmental NGOs and clean energy advocates say.
In a deal clinched in the early hours of Tuesday, EU leaders, the European Commission and the Parliament agreed a series of amendments to the Corporate Sustainability Due Diligence Directive (CSDDD), which will require larger companies to identify and address any environmental or human rights violations in their supply chains.
The amendments, which still need formal approval by the Parliament and EU member states, mean the due diligence requirements will apply to far fewer companies than initially targeted and maximum penalties will be reduced from 5% to 3% of a company’s annual global turnover.
In another change, the EU also scrapped a requirement for companies to publish climate transition plans setting out how they would make their business model compatible with the Paris Agreement.
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The EU Commission said the changes, which follow months of corporate lobbying, US pressure and interventions by France and Germany, will remove all requirements for many smaller companies and introduce greater flexibility for larger companies, which will help to ease administrative burdens on businesses and drive investment.
But climate campaigners and clean tech industry representatives said the watered down rules were a setback for European efforts to clean up supply chains and reduce emissions.
“By deleting the climate transition plan implementation, the EU is weakening the key legislative frameworks for businesses to prepare for climate risks and global challenges that can severely affect their operations and value chains,” said Julia Otten, who works on corporate due diligence at Frank Bold, a sustainability NGO and law firm.
“This is counter-productive for businesses, weakens accountability, and jeopardises the EU’s own plans and objectives on climate and the industrial transition,” she added.
“Extremely disappointing”
Industry leaders in clean energy technologies say that the changes undermine their sector’s climate efforts and risk putting companies that prioritise sustainability at a disadvantage.
Rachel Owens, CEO of the Solar Stewardship Initiative, a multistakeholder scheme that has set out standards for what transparent and sustainable solar value chains should look like, told Climate Home News the move was “extremely disappointing”.
Requiring companies to set out their climate transition plans would have demonstrated that the production of solar panels and other renewable energy technologies and the energy they generate have much lower emissions than their fossil fuel alternatives, she said.
For Maurice Loosschilder, global head of sustainability at Signify – a multinational company that manufactures LED lighting systems that help reduce energy consumption – the removal of the climate transition plans from the law will make it more difficult to align businesses and their supply chains with the EU’s climate goals and could reduce incentives for innovation.
Because of its large size, Signify still falls under the law’s requirement. But Loosschilder said he was concerned that the company could lose its competitive edge when faced with small companies for which the same sustainability rules do not apply.
Intense lobbying
The agreement reached on Tuesday followed intense lobbying by industry and governments.
In a letter addressed to EU leaders, the US and Qatar warned that investment and energy supplies to the EU would be harmed if the CSDDD came into effect in its original form.
Documents obtained by the Amsterdam-based Centre for Research on Multinational Corporations (Somo) show how 10 major companies lobbied to dilute the regulation. This included oil and gas majors ExxonMobil, Chevron and TotalEnergies as well as metals and minerals producer Nyrstar, a subsidiary of commodity trading giant Trafigura Group.
Total Energies defended its advocacy in Brussels and in European capitals as being “in full compliance with applicable laws and regulations”. The other companies did not respond to Somo’s requests for comment.
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NGO Global Witness accused EU leaders of giving in to lobbying by the fossil fuel industry.
“Major oil and gas giants will now be able to dodge their responsibility to act on [the] climate, largely thanks to intense US political and corporate pressure,” Beate Beller, a senior campaigner at Global Witness, told Climate Home News.
The EU’s about-face also weakens efforts to clean up the supply chains of technologies needed for the energy transition such as electric vehicles, batteries and solar panels.
“Clean tech cannot be ‘clean’ if the raw materials behind it are mined under weakened standards. This is what made the spirit of the CSDDD so promising: it paired climate transition plans to cut fossil-fuel dependence with robust human-rights and environmental due diligence across clean-tech supply chains,” she added.
Lower bar on supply chain oversight
The rules will now only apply to companies established in the EU with at least 5,000 employees and a net global turnover of 1.5 billion euros. It had originally applied to companies with at least 1,000 employees and turnover of 450 million euros. Member states have until July 2028 to transpose the requirements into national law.
When assessing their supply chains, companies will need to follow a risk-based approach and focus on areas that carry the biggest potential for harm. For example, an EV maker might focus on the production of the battery, which requires a range of different minerals whose extraction and processing carry high risks.
However, companies are no longer required to carry out comprehensive mapping of their direct and indirect suppliers. Instead, they will need to conduct “a general scoping exercise” based on “reasonably available information”.
Johannes Blankenbach, a senior researcher at the Business and Human Rights Centre, told Climate Home News that it is important that companies identify risks beyond their direct suppliers.
That’s because the most severe risks typically lie further up the supply chain, for example, where raw materials are sourced or extracted from the ground, he said.
In addition, harmonised rules across the EU to allow victims of harms to take companies to court have been removed, which will make it more difficult for communities to find legal remedies, Blankenbach added.
While the EU Commission said the less onerous requirements should help drive investment, Sonia Dunlop, CEO of the Global Solar Council, a trade body for the solar industry, said investors in solar farms wanted guarantees about the origin of solar panels and battery storage equipment.
“They want to know where it was made, and they want to know that it was properly made according to the highest environmental, social and governance standards,” she said, citing industry initiatives to boost supply chain transparency and standards such as the Solar Stewardship Initiative.
She said the initiative had been spurred by both the EU’s plan to tighten due diligence laws as well as industry concerns over the use of forced labour in the production of polysilicon used in solar panels in China’s Xinjiang region.
The post EU weakening of corporate sustainability rules ‘jeopardises’ climate action, critics say appeared first on Climate Home News.
EU weakening of corporate sustainability rules ‘jeopardises’ climate action, critics say
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The Turkish government has announced the dates and venues for the COP31 leaders’ summit and pre-COP meetings, and appointed a Turkish waste campaigner and Australian cattle farmer as climate “champions”.
In an open letter, published by the UN climate body on Tuesday, the Turkish environment minister and COP31 President-Designate Murat Kurum said the COP31 World Leaders’ Summit, at which dozens of heads of government are expected, will take place in Antalya, on Türkiye’s south coast, on November 11 and 12.
Previous leaders’ summits have taken place on the first two days of the COP negotiations or, at last year’s conference in Belém, before the start. But this year’s gathering will take place on the third and fourth day (Wednesday and Thursday) of the November 9-20 talks. Kurum said the summit “will be a key moment in generating political momentum and visibility for COP31”.
Last November, when Türkiye was chosen as host of the annual UN climate summit, Kurum said that, while the negotiations would be in the resort city of Antalya, the leaders’ summit would take place in the country’s largest city Istanbul. No explanation for the change of decision was given in Kurum’s letter.
Pacific pre-COP
Every COP conference is preceded by a smaller pre-COP gathering, attended by government climate negotiators. Because of a deal struck with Australia, which gave up its bid to physically host the summit in exchange for leading the COP31 discussions, this year’s pre-COP will take place on the Pacific island of Fiji, with a “leaders’ event” a 2.5-hour flight north in Tuvalu.
Kurum’s letter said both events would take place between October 5-8 and “will contribute to reflecting diverse perspectives in an inclusive manner”.
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The letter confirms that Australia’s climate and energy minister, Chris Bowen, will be given the title of “President of Negotiations” and “will have exclusive authority in leading the COP31 Negotiations, in consultation with Türkiye”.
“I have complete faith in his work,” said Kurum, adding that the two will send out a joint letter “in the coming weeks” which outlines their priorities regarding the negotiations.
The COP negotiations will be discussed at the annual Petersberg Climate Dialogue in Berlin on April 21 and 22. German State Secretary Jochen Flasbarth recently announced plans to travel to Australia and meet with Bowen to discuss the talks.
COP31 champions
In his letter, Kurum announced that Samed Ağırbaş, president of Türkiye’s Zero Waste Foundation, which was set up by the country’s First Lady, has been appointed as the COP31 Climate High-Level Champion, tasked with working with business, cities and regions and civil society to promote climate action.
Sally Higgins, a young Australian cattle farmer and sustainability consultant who has also carried out research on land-use change, has been appointed as Youth Climate Champion. Kurum said she “is a passionate advocate for climate change and elevating the voices of young people”.
Turkish officials Fatma Varank, Halil Hasar and Mehmet Ali Kahraman have been appointed as COP31 CEO, Chief Climate Diplomacy Officer and Director of the COP31 Presidency Office respectively. Deputy environment ministers Ömer Bulut and Burak Demiralp will lead on construction and infrastructure, and operational and logistical processes.
Kurum said Türkiye’s Presidency would continue to use the Troika approach – a term coined two years ago under Azerbaijan’s COP29 Presidency, which worked with the previous Emirati COP28 and subsequent Brazilian COP30 hosts.
Kurum said the Troika approach offers “stability and predictability by connecting past, current and future presidencies” and that “in this regard” Türkiye and Australia would work “in close cooperation with Azerbaijan and Brazil”. This appears to overlook the 2027 COP32 host – Ethiopia.
The post Türkiye sets COP31 dates and appoints Australian cattle farmer as youth champion appeared first on Climate Home News.
Türkiye sets COP31 dates and appoints Australian cattle farmer as youth champion
Mae Buenaventura is the manager of the debt justice programme of the Asian Peoples’ Movement on Debt and Development, a regional alliance of peoples’ movements, community organizations, coalitions, NGOs and networks
A potentially historic shift in public debt governance is set to unfold in Washington DC this week as Global South governments take a collective stand to stop a “silent killer” of development financing.
The first-ever UN-hosted borrowers’ forum will officially be launched on April 15 on the sidelines of the 2026 Spring Meetings of the International Monetary Fund (IMF) and the World Bank. Led by five convening countries – Zambia, Egypt, Nepal, the Maldives and Pakistan – the initiative is one of the key wins of last year’s 4th Financing for Development Conference (FFD4) in Sevilla, Spain.
The forum’s mandate is to establish a platform for borrower countries, supported by a UN secretariat, “to discuss technical issues, share information and experiences in addressing debt challenges, increase access to technical assistance and capacity-building in debt management, coordinate approaches and strengthen borrower countries’ voices in the global debt architecture”.
Instead of facing lenders alone, these countries will now use a UN-backed platform to share technical expertise and coordinate their approach to a global debt system that is fundamentally broken.
Debt grips climate-vulnerable nations
The human cost of the current debt architecture is staggering. According to the UN trade and development agency, UNCTAD, more than 40% of the global population – roughly 3.4 billion people – live in countries where the government is forced to spend more on debt payments than on the health, education and social protection of its citizens.
In so-called low-income countries, governments spend an average of 7.5% of their total budgets on debt service, with interest payments consuming up to 20% of total government revenue in these regions.
The Philippines is a case study in this financial stranglehold. It is part of a global majority forced to watch its public services crumble and infrastructure lag while its wealth is siphoned off to satisfy foreign lenders.
The policy of automatic appropriations – a legacy of the rule of late former President Ferdinand Marcos Sr. – mandates that debt servicing takes precedence over any other public expenditure, effectively placing the demands of lenders above the needs of the Filipino people. Even as it faces a $1.5 trillion regional financing gap to achieve the Sustainable Development Goals (SDGs) by 2030, its hands remain tied by a legal framework that values credit ratings over human lives.
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As a “middle-income country” (MIC), the Philippines is stuck in a frustrating purgatory. It is often deemed “too wealthy” for the G20’s debt-relief framework, yet too poor to absorb global economic shocks. Last year, Finance Undersecretary Joven Balbosa hit the nail on the head when he called for support that goes “beyond the simplistic income categorization” that ignores a country’s actual vulnerabilities.
Without an inclusive and equitable global debt architecture, nations including the Philippines are left to navigate catastrophic climate risks and economic shocks with zero fiscal breathing space.
No respite during climate disasters
The regional evidence of this systemic failure is everywhere. Take Pakistan, which in 2022 was hit by catastrophic flooding that submerged a third of the country and caused billions in losses. Despite this climate-driven disaster, World Bank data shows that Pakistan made payments in 2023 of $11.8 billion for public and publicly guaranteed (PPG) external debt, while its PPG external debt reached $93 billion that same year, surpassing pre-pandemic debt of $87 billion (2020).
Sri Lanka followed IMF prescriptions throughout 16 lending programs since 1991, only to become the first Asian country this century to default. Its MIC status prevents application for debt relief and restructuring measures. Today, the Sri Lankan people bear the brunt of harsh conditionalities, including raising VAT from 8% to 15%, slashing food and fuel subsidies, and the erosion of hard-earned worker pensions.
Currently, the global rules of lending and borrowing are set by a “creditors’ club” composed of the IMF, the World Bank and the Global Sovereign Debt Roundtable it set up, and the Paris Club.
These institutions measure “debt sustainability” through a narrow lens of a country’s capacity to make timely repayments. They largely ignore internal economic inequalities, gender disparities and the existential threat of climate change.
Crises should trigger debt service cancellation
By organising the new borrowers’ forum, the Global South is signalling that the era of passive “standard-setting” by lenders is over.
The ultimate goal for global civil society and debt justice movements is the establishment of a UN Debt Convention; a democratic, binding and inclusive framework that governs both lenders and borrowers. This mechanism would ensure that debt restructuring and cancellation are sufficient to allow countries to fulfill their international human rights obligations and implement necessary climate actions.
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To be truly transformative, debt sustainability analyses must align with human rights and sustainable development needs. This means conducting impact assessments – both before and after loans are issued – to identify “illegitimate” debts that do not benefit the public.
Crucially, we need an automatic debt service cancellation mechanism that triggers during extreme climatic, environmental or health shocks. We also need a binding global debt registry to ensure that every loan is transparent and subject to public scrutiny.
Whether the borrowers’ forum becomes a true milestone depends on its courage to challenge the status quo. We can no longer allow debt to act as a “silent killer” of our future. It is time to demand a financial system that serves humanity, not just the balance sheets of the powerful.
The post Broken debt system must be fixed to confront future climate shocks appeared first on Climate Home News.
Broken debt system must be fixed to confront future climate shocks
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