EPP Collides with Far Right to Weaken Corporate Reporting Rules

On Thursday, the European Parliament gave its approval to a set of measures aimed at streamlining corporate sustainability reporting and red...

On Thursday, the European Parliament gave its approval to a set of measures aimed at streamlining corporate sustainability reporting and reducing the rigor of due diligence obligations.

The European People’s Party (EPP) collaborated with the European Conservatives and Reformists (ECR) and the far-right Patriots for Europe (PfE) to enact the law, following a vote on numerous amendments.

The legislation is a component of the EU's initiative to streamline processes and seeks to simplify sustainability reporting and due diligence requirements for European companies. The version of the law proposed by the Parliament must now be discussed with member states prior to final approval.

The legislature was turned down by Parliament in October, after an agreement was finally made between the center-right factions.voted downduring the plenary session because of some members from the Socialists and Democrats (S&D) party defecting.

This obstacle drew criticism from member states, including German Chancellor Friedrich Merzlabellingthe vote was "a critical error".

After that, EPP chose to go right. On Thursday, the legislation passed with 382 Members of the European Parliament supporting it, 249 opposing, and 13 abstaining.

The right-wing faction of the hemicycle backed the legal proposal prepared by Swedish EPP rapporteur Jörgen Warborn, which specifies that due diligence obligations are applicable solely to companies employing over 5,000 individuals and generating a net annual revenue exceeding €1.5 billion.

It marks a major shift from the initial clauses of the Corporate Sustainability Due Diligence Directive, which were applicable to firms with over 1,000 staff and an annual revenue of €450 million.

The Parliament also removed penalties that could reach 5% of a company's net revenue if it failed to comply. "The wording suggests 'suitable amounts,' and it is left to the member states to determine (the level of the fines)," Warborn mentioned during a press conference following the vote.

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EPP's two-track approach in the European Parliament

This is not the first instance where EPP lawmakers have aligned with their counterparts from the right-wing ECR, the far-right PfE, and Europe of Sovereign Nations (ESN) during this parliamentary term.

The EPP is the biggest faction in the chamber and has the ability to pass laws with either a center-ground or conservative majority, an occurrence never seen before in the European Parliament.

The initial appearance of analternative majorityoccurred in October 2024, when right-wing Members of the European Parliament came together to acknowledge Edmundo González as the president of Venezuela through a non-binding resolution.

A month later, the EU's deforestation regulation was delayed and weakened by Parliament, with proposals submitted by the EPP seeking to ease requirements for importers, supported by ECR, PfE, and ESN. Members of Renew Europe from the liberal group were split, while parties on the left opposed the changes.

Since that time, the EPP has occasionally collaborated with right-wing groups, particularly concerning climate-related matters, while publicly rejecting any formal partnership.

The vote today represents the final instance of dual-track approach by the EPP, which the Commission might also use to advance contentious legislation regarding the environment and migration. It demonstrates that the EPP has the option to collaborate with centrist groups on certain issues and with right-wing parties, including those on the far-right, on others.

We needed to secure a majority in a scenario where we aimed to support businesses in their operations," Warborn stated. "We introduced EPP amendments, which were backed by the right-wing parties.

In a significant vote during the same session, the center-left majority supported the amendment of the bloc's environmental legislation, aiming for the EU27 to reduce 90% of greenhouse gas emissions by 2040.

The amendment to the law was passed with 379 votes supporting, 248 opposing, and 10 abstentions, after a lengthy debate.agreement struckon Monday by the EPP, S&D, Renew Europe, and the Greens/EFA groups in the Parliament's environment committee.