• Chancellor Merz calls for full cancellation of the EU’s Corporate Sustainability Due Diligence Directive (CSDDD).
• German government plans to revoke its national implementation of the directive.
• Business community concerns over compliance burden gain high-level political backing.

German Chancellor Friedrich Merz has publicly urged the European Union to cancel its Corporate Sustainability Due Diligence Directive (CSDDD), signaling a potential reversal in Europe’s approach to ESG regulation.

“We will revoke the national law in Germany. And I also expect the European Union to follow suit and really cancel this directive,” Merz said during his first official visit to Brussels as Chancellor.

The CSDDD, adopted in 2023 and scheduled for enforcement in 2028, mandates large companies to identify and address human rights violations—such as forced and child labor—across their global supply chains. It’s a central element of European Commission President Ursula von der Leyen’s ESG agenda to embed human rights and environmental accountability into corporate governance.

Despite strong backing from civil society and ESG advocates, parts of the business community have criticized the directive for imposing what they consider excessive and costly compliance obligations that could erode European competitiveness.

Merz, representing the center-right Christian Democratic Union (CDU), aligned himself with corporate concerns, while expressing general support for the Commission’s broader drive to reduce red tape.

“We need less bureaucracy, not more,” he emphasized, backing deregulatory moves across EU policy.

The Chancellor’s statement places Germany—the EU’s largest economy—at odds with the bloc’s legislative direction on sustainability governance, potentially reshaping ESG policy debates ahead of the 2028 enforcement timeline.

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