Legal scholars warn against watering down of corporate climate transition plans
A letter from 31 of Europe's leading legal scholars states that the EU's Omnibus Package is undermining legal certainty and creating litigation risk, and would strike a blow against climate action. Here, Thom Wetzer, Associate Professor of Law and Finance and Director of the Oxford Sustainable Law Programme, who coordinated the letter, explains the implications of the proposed change.
Legal scholars write to express concern regarding an amendment in the ‘Omnibus Simplification Package’ (Omnibus) proposed by the European Commission, which would significantly weaken Article 22 of the Corporate Sustainability Due Diligence Directive (CSDDD). The proposed amendment would weaken Article 22 by removing the obligation for Climate Transition Plans to be ‘put into effect’. The authors strongly advise against this proposed weakening of Article 22.
Members of the European Parliament are currently considering the EU Omnibus Package, which aims to reduce compliance complexity and help companies embrace the transition to a sustainable economy.
The letter, coordinated by Wetzer with the support of Nick Young and the Oxford Sustainable Law Programme, focuses on Art 22 of the Corporate Sustainability Due Diligence Directive (CSDDD), which originally required that large companies develop and "put into effect" a climate transition plan.
The legal scholars conclude that removing that phrasing - as is currently proposed - would mean that while companies would still be required to have an emission-reduction plan, they would not need to put it into action. As they wrote in the letter, "mere paperwork, instead of good faith action, would suffice in meeting the obligation".
Thom Wetzer notes, "As the change calls into question the nature of the legal obligation facing companies, this could prompt concerned parties to litigate. This, alongside the constantly shifting goal posts of EU climate policy, will make it harder for businesses to commit to a sustainability strategy for the long term.”
Wetzer continues: “The EU Commission intends for the Omnibus Package to simplify rules and reduce regulatory burdens to enhance the EU's competitiveness. But the current Omnibus Package with respect to Art 22 CSDDD would have the opposite effect, as well as striking a blow for climate action. We hope our letter can be helpful to the Members of the European Parliament, to make an informed decision on how to proceed.”
The letter has been covered by leading international media outlets, including Reuters and Bloomberg.
