All 27 European Union member countries have called for radical cuts to ethical supply chain rules, setting the stage for tense negotiations with other EU institutions later this year. 

The call echoes growing pressure to cut back environmental laws to reduce the regulatory burden on business and boost the bloc's sluggish economy, reports Politico.

On the evening of June 23, EU ambassadors endorsed the Council of the EU's proposal that aims to simplify the directives on corporate sustainability reporting (CSRD) and the due diligence law, Corporate Sustainability Due Diligence Directive (CS3D), by reducing the reporting burden and limiting the trickle-down effect of obligations on smaller companies. It is one of the first major bills of Ursula von der Leyen's second term as European Commission president.

On the CSRD, the Commission proposed to increase the employee threshold to 1,000 employees and to remove listed small and medium-sized businesses from the scope of the directive. In its mandate, the Council added a net turnover threshold of over €450 million ($523 million) to further alleviate the reporting burden on undertakings. The Council’s mandate also introduces a review clause concerning a possible extension of the scope to ensure adequate availability of corporate sustainability information.

If endorsed by the EU as a whole, the new rules would mean that fewer than 1,000 European companies would be subject to the CS3D.