More than one hundred lawyers and academics have warned the European Commission that it risks creating “years of legal uncertainty” if it pushes ahead with a revised version of non-financial reporting and human rights due diligence laws in the so-called “omnibus” process.

In a letter published just days ahead of a crucial European Parliament vote, the lawyers take aim at the current revised versions of the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), arguing they may breach well-established legal principles used by Brussels.

“If adopted as it is,” the letter says, “this proposal faces a high risk of legal challenges in national or EU courts.

“Such proceedings would likely cause years of uncertainty, undermining the predictability and ultimately the very competitiveness the Commission aims to promote, while affecting the Union’s commitment to the rule of law and international obligations.”

At the heart of the lawyers’ warning is the “proportionality” principle, meaning benefits of any changes must outweigh the negative impacts. As the lawyers point out, no impact assessment has been carried out for the revisions, which were launched in February this year as part of a concerted effort to slim down green European regulation to make the union more competitive.

Andreas Rasche, professor of business at Copenhagen Business School, a frequent commentator on the omnibus, writes on LinkedIn: “In short the legal uncertainty around the omnibus may not disappear even after a final vote.”

What the lawyers seek in their letter is assurance that no changes to CSRD and CSDDD take place without a review by the European Parliament’s Legal Service to ensure the changes are “compatible with the proportionality principle”.

‘Regulatory certainty’

“Only such structured review can safeguard the Union’s legal integrity, protect the fundamental rights, and provide essential regulatory certainty for sustainable competitiveness,” the lawyers write.

Last month, the Legal Affairs committee of the European Parliament voted to slash the scope of the CSRD to companies with 1,000 employees or more and with a turnover of at least €450m. Meanwhile, CSDDD would only apply to companies of 5,000 workers and income of €1.5bn.

Though the committee agreed the changes, they were defeated by the Parliament on review and must now face a “plenary” vote on Thursday this week.

According to the lawyers’ letter, the other two claims are that the omnibus amendments would “reduce existing protections for fundamental rights,” in breach of the so-called “non-regression” principle, which aims to prevent backsliding on EU standards.

The omnibus amendments have proved highly controversial, not only in Brussels but also in Washington. Last week, a number of large US business groups, among them the US Chamber of Commerce, wrote to Treasury secretary Scott Bessant, calling for pressure on the EU to backtrack on the CSDDD. In their letter, they called the directive “egregious”.

At issue is the legislation’s “extra-territorial” effect, which would capture foreign companies operating in Europe, including those from the US.

Though there has been much discussion of the impact on foreign companies, none of the revisions so far have addressed the principle.

A vote on the omnibus is only days away. Pressure will continue right up until the last minute.