By Hélène Bohyn, Policy & Advocacy Manager, and Ana Villalobos Prada, Policy and Advocacy Officer at the Better Cotton Initiative

The European Parliament’s recent endorsement of the Omnibus I Simplification Package threatens to significantly weaken corporate sustainability obligations under the CSRD and CSDDD. What is presented as ‘simplification’ is in truth a dangerous dilution of essential safeguards. By diluting due diligence and reporting requirements, the EU risks sidelining thousands of businesses – alongside the farmers and vulnerable communities they impact – at a time when transparency, accountability, and climate action are more urgent than ever.  

As the world’s largest cotton sustainability standard, the Better Cotton Initiative (BCI) sees first-hand how robust due diligence drives real change. It enables companies to identify and address risks like child labour, unsafe pesticide use, and unfair purchasing practices – issues that directly affect cotton farmers, especially smallholders, and their communities. 

Not all hope is lost. With the European Parliament about to start the final stretch of negotiations with the European Commission and the Council of the European Union – the so-called trilogue negotiations – the European institutions have a choice to make: uphold their leadership on responsible business conduct or allow ambition to unravel behind closed doors.

As they approach these negotiations, we strongly urge the European Parliament to reconsider and call on businesses to resist the temptation to lower their standards.  

Who pays the highest price? 

Rather than bringing clarity, the changes approved by the European Parliament’s Committee on Legal Affairs have created confusion for companies and rightsholders. Many terms remain vague, making compliance harder and potentially slowing progress on sustainability and human rights protection. As we all know, clarity and ambition are essential to maintain trust and drive meaningful change.  

In the cotton sector, these changes will potentially have significant consequences. They risk removing incentives for brands to address purchasing practices, promote decent living wages, or implement traceability – all issues critical for farmers’ livelihoods and sustainability goals. Voluntary reporting and strong due diligence remain, however, critical for credibility, competitiveness, and climate resilience. Companies that will become out of scope must, therefore, remain resolute and not step back. 

Better Cotton Initiative’s position is clear 

• Due diligence is non-negotiable: BCI will continue to uphold rigorous due diligence standards aligned with UNGP and OECD’s Guidelines, regardless of legislative changes; 

• We will remain engaged: BCI is committed to working with EU institutions to advocate for a strong, ambitious due diligence framework;  

• We call for renewed ambition: We urge EU leaders to restore the integrity of the CSDDD and CSRD and ensure companies remain accountable for their impacts. 

Unless it is meaningful, there is no due diligence  

The revised directive limits companies’ ability to proactively engage with suppliers. It removes contractual assurances, restricts information requests to small businesses, and allows companies to avoid penalties if data is unavailable.  

The erosion of such important pieces of legislation requires action. At the Better Cotton Initiative, we will work with and encourage our members and partners to advocate for a due diligence framework that remains proactive, inclusive, and risk-based.  

Companies must be empowered – and required – to engage meaningfully across their supply chains, including with smallholder farmers. We call on EU institutions to restore provisions that enable early risk identification and stakeholder consultation, ensuring due diligence drives real accountability.  

Climate action, not just goals  

The changes recently approved also weaken requirements for climate transition plans, allowing companies to disclose goals without demonstrating how they will achieve them.  

BCI calls on stakeholders to push for climate transition plans that go beyond mere disclosure. These plans ought to include concrete steps aligned with the Paris Agreement, such as setting measurable targets for Scope 3 emissions – and outline concrete actions across their supply chains, supporting regenerative agriculture, investing in low-emission logistics, and transitioning to renewable energy. Ambition must be matched by implementation. 

EU-wide civil liability is critical 

The removal of EU-wide civil liability undermines the ability of affected communities to seek justice across borders. Farm-level actors – including smallholder cotton farmers – are often the first to experience the impacts of unsustainable practices, yet their voices are rarely heard in corporate decision-making.   

BCI urges EU institutions to reinstate a unified civil liability mechanism to enable access to remedy for rightsholders, provide legal certainty for companies operating in multiple jurisdictions, and ensure consistent enforcement of human rights and environmental standards.

Civil society and farmer collectives must also be meaningfully engaged in shaping, implementing and monitoring civil liability frameworks to ensure that sustainability efforts reflect lived realities, protect rightsholders, and drive accountability across the value chain.  

Many companies – especially mid-sized retailers and brands – will no longer be required to conduct due diligence or report on sustainability risks. This is dangerous. Voluntary reporting and strong due diligence must not become a loophole for inaction.  

What else can we do?   

With final negotiations approaching, we urge stakeholders to act decisively by: 

• Contacting MEPs to raise objections and push for stronger safeguards;  

• Engaging with national governments involved in trilogue negotiations;  

• Coordinating with civil society and industry coalitions to amplify concerns and propose constructive amendments; 

• Using media and public platforms to highlight the risks of dilution and the need for ambition. 

Those committed to responsible business conduct can mitigate the reduced legal requirements by continuing to apply robust due diligence aligned with international standards, engaging proactively with suppliers, investing in traceability, and amplifying stakeholder voices, especially at farm level. 

The stakes are high, and time is short. If no objection is raised in the European Parliament’s plenary, final negotiations could begin as early as 24 October.  The EU must not retreat from its leadership role. We all need to act before the ambition is lost – and with it, the opportunity to build a fairer, more sustainable future.

Read BCI’s statement to the press: BCI warns against ‘dangerous dilution’ of EU corporate directives