Macron Joins Germany To Scrap EU Supply Chain Law

French President Emmanuel Macron added his voice to that of German Chancellor Friedrich Merz in calling for the elimination of the European Union's Corporate Sustainability Due Diligence Directive (CSDDD), a flagship law seeking to hold businesses accountable for their effects on human rights and the environment across their supply chains. Addressing the "Choose France" International Business Summit on Monday, Macron underscored that the directive and other companion regulations must be eliminated in full and not just delayed or streamlined.

The CSDDD, which was put forward by the European Commission in February 2022, is one of the EU's most sweeping attempts to make businesses responsible for their upstream and downstream activities that impact individuals and the planet. The directive addresses a broad range of topics, from workers' rights, slavery, and child labor to environmental issues like deforestation, pollution, greenhouse gas emissions, and ecosystem degradation. It obliges firms to identify, evaluate, prevent, mitigate, and repair negative impacts across their value chains, not just their direct operations, but also partners engaged in recycling and distribution.

Following a long legislative process, the directive was adopted in May 2024 but not without extensive modifications that reduced its scope and postponed its application. Perhaps most significantly, one of the changes made was to the threshold of size for the entities that the law would cover. Initially, the plan was to subject the CSDDD to firms with 500 or more workers. But with pressure from France, the threshold was increased to 1,000 employees, slashing the number of businesses impacted by the rules by keeping out about 80% of firms that would have been covered by the initial proposal.

Since adoption of the directive, the European Commission has initiated the Omnibus process in February 2025, with the aim of reducing the burden of sustainability reporting and compliance on companies. This procedure has suggested additional delays and changes to the directive, such as extending the date for full implementation to 2028, reducing the level of due diligence for only direct business partners, decreasing the monitoring rate from yearly checks to every five years, and reducing the amount of information businesses can ask for from smaller vendors.

France has been assertive in calling for relief from the burden of the CSDDD. Even before the Omnibus process, French authorities had pressed for the indefinite suspension of the implementation of the law, demonstrating fears regarding how tight regulation could impact the global competitiveness of French companies. Macron's address during the summit, however, made one additional step by calling not only for suspension or amendment, but for the complete repeal of the directive.

During the summit, Macron emphasized adopting EU regulations that are in line with international standards, specifically in order to establish a level playing field for European businesses competing with their counterparts in the United States, China, and other economies. Macron contended that there is an uneven regulatory burden placed on European businesses at present, which disadvantages them abroad and at home. Macron was very much in support of Germany's stance, stating, "Evidently we are very much on the same page now with Chancellor Merz… CSDDD and a few other regulations must not only be delayed for a year, but to be kicked out of the table."

Merz, Chancellor of Germany, has been one of the strongest voices against the CSDDD in Germany, pointing to its burdens for both big and small companies. His demand to cancel the law echoes widespread reservations in some EU member states concerning striking a balance between sustainability goals and economic competitiveness, particularly in the face of rising geopolitical tensions and trade rivalry.

This resistance by France and Germany is a serious test for the EU's wider sustainability agenda. The CSDDD was intended to be a pillar in Europe's drive to integrate corporate responsibility into the DNA of business, so that companies tackle their adverse social and environmental effects proactively, not merely by disclosing risks. Supporters claim that these due diligence regulations are crucial to support sustainable and responsible supply chains, shield vulnerable workers, and address climate change.

Opponents argue that the directive's demands are excessively heavy for mid-tier firms and will lead to businesses moving their operations abroad or reducing them. They caution against strict regulations deterring investment and innovation or companies prioritizing compliance over actual sustainability enhancements. Macron's position, supported by Germany, is a strong move to realign the EU's strategy by putting competitiveness and relief from regulation ahead of obligatory due diligence.

With the controversy growing, the European Commission is at a crucial turning point. The Omnibus process seeks to simplify rules, but Macron's and Merz's appeals open the prospect of repealing critical components or even scrapping the directive. The decision will have far-reaching consequences not just for European businesses, but also for global actions in making corporate accountability on human rights and environmental concerns stick.

With the effective implementation of the CSDDD now delayed until 2028, the EU has time to rethink its strategy, but pressure from large member states such as France and Germany indicates a possible shift away from binding sustainability due diligence towards a less rigid, business-friendly model. The row underscores the fine balance between ambitious sustainability aspirations and the economic challenges of business in an increasingly competitive global marketplace.