EU PARLIAMENT APPROVES CORPORATE SUSTAINABILITY DUE DILIGENCE DIRECTIVE

On 1 June, the European Parliament adopted the Corporate Sustainability Due Diligence Directive (CSDD), with 366 votes in favour, 225 against and 38 abstentions. This is a historic step for the EU, which is moving ever closer to the international business and sustainability standards dictated by the UN Guiding Principles and the OECD Guidelines.

This new directive requires large companies to conduct due diligence on human rights and the environment at all stages of the global value chain, to assess the negative impacts caused by their activities, prevent them and provide remedies where necessary, in particular by providing safeguards for victims of human rights and environmental abuses.

Although the directive shortens the route to justice, it places a particularly heavy burden of proof on the victims of corporate abuses as they are called upon to prove not only the harm suffered but also the failure or insufficient exercise of due diligence by companies. In this regard, Impresa 2030 – Diamoci una regolata is active in Italy to make sure that there is more focused attention on this point and is taking care of the awareness-raising campaign on this issue, through its network.

The CSDD will involve European companies with more than 250 employees with a turnover of EUR 40 million or more and operating in one or more high-impact sectors (mining, clothing and footwear, agriculture) and companies with more than 500 employees and a turnover exceeding EUR 150 million. It will also cover companies from non-EU countries operating in the EU with a turnover exceeding EUR 150 million, of which at least EUR 40 million is generated within the EU.

The next step is the trialogue between the Parliament, the Commission and the Council of the European Union, for an agreement on the final text of the law, which will then be transposed by the individual member states into national law. The negotiations have already started and are expected to be concluded by spring 2024.  

While waiting to see how the interinstitutional dialogue will evolve, companies will have to take steps to create and strengthen teams to comply with the new legislation, implement due diligence programmes on human rights and the environment, and set up appropriate risk-tracking systems.

Article by Cecilia Robellini, Climate and Rights Section Volunteer