Proposal for a Directive on Corporate Sustainability Due Diligence and amending Directive (EU) 2019/1937

Author (Corporate)
Series Details COM (2022) 71
Publication Date 23/02/2022
Content Type , ,

Summary:

Legislative initiative tabled by the European Commission on 23 February 2022, addressing Corporate Sustainability Due Diligence (CSDD) and introducing amendments to Directive (EU) 2019/1937. This is a text with EEA relevance.

Further information:

The behaviour of companies across all sectors of the economy is key to succeed in the European Union's transition to a climate-neutral and green economy. This requires implementing comprehensive mitigation processes for adverse human rights and environmental impacts in their value chains, integrating sustainability into corporate governance and management systems, and framing business decisions in terms of human rights, climate and environmental impact, as well as in terms of the company’s resilience in the longer term.

However, EU companies operate in complex surroundings and, especially large ones, rely on global value chains. They may therefore encounter difficulties to identify and mitigate risks in their value chains linked to respect of human rights or environmental impacts. Identifying these adverse impacts in value chains is seen as becoming easier if more companies exercise due diligence. Some EU companies have started using value chain due diligence as a tool to identify risks in their value chain and build resilience to sudden changes in the value chains, via the existing international voluntary standards on responsible business conduct.

Voluntary action did not appear to have resulted in large scale improvement across sectors. At the same time, emerging legal frameworks on corporate due diligence in some Member States reflected an increasing desire to support companies in performing due diligence, but also raised concerns over potential fragmentation and legal certainty, as well as the level playing field for companies in the EU's Single Market.

The proposed Directive aims to set out a horizontal framework aimed at fostering the contribution of businesses operating in the Single Market to the respect of the human rights and environment in their own operations and through their value chains. This draft law followed calls by the European Parliament (March 2021) and the Council of the European Union (December 2020) concerning action on sustainable corporate governance. The proposal also took into account a public consultation and two external studies. It was published alongside a Communication on Decent Work Worldwide.

Source Link https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM:2022:71:FIN
Related Links
Commentary and Analysis
Norton Rose Fulbright: Publications, February 2022: European Commission tables long-awaited human rights and environment due diligence law https://www.nortonrosefulbright.com/en/knowledge/publications/5c62993b/european-commission-tables-long-awaited-human-rights-and-environment-due-diligence-law
ECFR: Commentary, 22/02/2022: Law and global order: EU legislation on human rights due diligence https://ecfr.eu/article/law-and-global-order-eu-legislation-on-human-rights-due-diligence/
European Coalition for Corporate Justice (ECCJ): News, 23/02/2022: Dangerous gaps undermine EU Commission’s new legislation on sustainable supply chains https://corporatejustice.org/news/dangerous-gaps-undermine-eu-commissions-new-legislation-on-sustainable-supply-chains/
E3G: Blog, 23/02/2022: Sustainable Corporate Governance: EU’s next Green Deal battle https://www.e3g.org/news/sustainable-corporate-governance-eu-s-next-green-deal-battle/
OXFAM International: Press Release, 23/02/2022: New EU proposal on sustainable business needs fixing to work for people and the planet https://www.oxfam.org/en/press-releases/new-eu-proposal-sustainable-business-needs-fixing-work-people-and-planet
Accountacy Europe: Statement, 24/02/2022: EU Corporate Sustainability Due Diligence Directive: a global milestone that will need further clarity https://accountancyeurope.eu/good-governance-sustainability/eu-corporate-sustainability-due-diligence-directive-a-global-milestone-that-will-need-further-clarity/
Linklaters: Sustainable Futures, 24/02/2022: European Commission proposal heralds a brave new world of human rights and environmental due diligence https://sustainablefutures.linklaters.com/post/102hjf0/european-commission-proposal-heralds-a-brave-new-world-of-human-rights-and-enviro
White&Case: Alerts, 24/02/2022: European Commission issues major proposal on due diligence obligations to protect human rights and the environment across supply chains https://www.whitecase.com/publications/alert/european-commission-issues-major-proposal-due-diligence-obligations-protect
DLA Piper: Insights, 24/02/2022: European Commission proposal for the Corporate Sustainability Due Diligence Directive https://www.dlapiper.com/fr/france/insights/publications/2022/02/european-commission-proposal-corporate-sustainability/
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Oxford University: Faculty of Law Blog, 25/02/2022: Corporate Purpose and the EU Corporate Sustainability Due Diligence Proposal https://www.law.ox.ac.uk/business-law-blog/blog/2022/02/corporate-purpose-and-eu-corporate-sustainability-due-diligence
Pinsent Masons: OUT-LAW News, 25/02/2022: EU's sustainability due diligence law will have 'broad scope of application' in the ESG space https://www.pinsentmasons.com/out-law/news/eu-nachhaltigkeitsrichtlinie-lieferketten-menschenrechte
Norton Rose Fullbright: Publications, February 2022: European Commission tables long-awaited human rights and environment due diligence law https://www.nortonrosefulbright.com/en/knowledge/publications/5c62993b/european-commission-tables-long-awaited-human-rights-and-environment-due-diligence-law
UN Principles for Responsible Investment: PRI statement: European Commission proposal on Corporate Sustainability Due Diligence (3 March 2022) https://www.unpri.org/download?ac=15897
Travers Smith: Knowledge Conrtainer: Legal Briefing, 04/03/2022: Corporate Sustainability Due Diligence: A long-awaited proposal revealed https://www.traverssmith.com/knowledge/knowledge-container/corporate-sustainability-due-diligence-a-long-awaited-proposal-revealed/
Maastricht University: Blog, 06/03/2022: Don’t sweat the small stuff? The new proposal for the EU directive on corporate sustainability due diligence https://www.maastrichtuniversity.nl/blog/2022/03/don%E2%80%99t-sweat-small-stuff-new-proposal-eu-directive-corporate-sustainability-due
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Linklaters: Sustainable Futures, 10/03/2022: EU Proposal for a Directive on Corporate Sustainability Due Diligence: potential impact on businesses in Asia https://sustainablefutures.linklaters.com/post/102hkfg/eu-proposal-for-a-directive-on-corporate-sustainability-due-diligence-potential
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Verfassungsblog, 15/03/2022: Due Diligence Around the World: The Draft Directive on Corporate Sustainability Due Diligence (Part 1) https://verfassungsblog.de/due-diligence-around-the-world/
Avocats Sans Frontières (ASF): Blog, 17/03/2022: EU Due Diligence legislation : the EU Commission unveiled its proposal but serious gaps persist https://asf.be/blog/2022/03/17/eu-due-diligence-legislation-the-eu-commission-unveiled-its-proposal-but-serious-gaps-persist/
European Trade Union Confederation (ETUC): ETUC initial analysis of the Commission’s proposal for a Directive on Corporate Sustainability Due Diligence and updated roadmap for ETUC actions in 2022- 2023 (22 March 2022) https://www.etuc.org/en/document/etuc-initial-analysis-commissions-proposal-directive-corporate-sustainability-due
Völkerrechtsblog, 28/03/2022: Lessons for the EU Directive on Corporate Sustainability Due Diligence from the German Supply Chain Act https://voelkerrechtsblog.org/lessons-for-the-eu-directive-on-corporate-sustainability/
EUCRIM: News, 31/03/2022: Proposal for Directive on Corporate Sustainability Due Diligence https://eucrim.eu/news/proposal-for-directive-on-corporate-sustainability-due-diligence/
Raoul Wallenberg Insitute: Blog, 01/04/2022: The new EU Directive on Corporate Sustainability Due Diligence: origins, compliance effects and global significance https://rwi.lu.se/blog/the-new-eu-directive-on-corporate-sustainability-due-diligence-origins-compliance-effects-and-global-significance/
UK in a Changing Europe: Commentary, 05/04/2022: EU corporate sustainability rules mean new due diligence for UK companies https://ukandeu.ac.uk/eu-corporate-sustainability-rules-mean-new-due-diligence-for-uk-companies/
CMS Law-Now: eAlerts, 12/04/2022: EU Corporate Sustainability Due Diligence Directive calls for more stringent measures https://www.cms-lawnow.com/ealerts/2022/04/eu-corporate-sustainability-due-diligence-directive-calls-for-more-stringent-measures
Amnesty International: Civil society statement on the proposed EU Corporate Sustainability Due Diligence Directive (11 May 2022) https://www.amnesty.org/en/documents/ior60/5588/2022/en/
EPRS: Briefing, May 2022: Corporate sustainability due diligence: Could value chains integrate human rights and environmental concerns? https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2022)729424

News
The New York Times, 23/02/2022: Companies in the E.U. could be held liable for violations along their supply chain. https://www.nytimes.com/2022/02/23/business/economy/eu-supply-chain-violations.html
EurActiv, 25/02/2022: Comply or disengage, businesses ask after proposal of due diligence law https://www.euractiv.com/section/economy-jobs/news/comply-or-disengage-businesses-ask-after-proposal-of-due-diligence-law/

Official
EUR-LEX: SWD(2022)38: Staff Working Document accompanying the Proposal - Subsidiarity Grid https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2022:38:FIN
EUR-LEX: SWD(2022)39: Staff Working Document accompanying the Proposal - Follow-up to the second opinion of the Regulatory Scrutiny Board https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2022:39:FIN
EUR-LEX: SWD(2022)42: Staff Working Document accompanying the Proposal - Impact Assessment Report https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2022:42:FIN
EUR-LEX: SWD(2022)43: Staff Working Document accompanying the Proposal - Executive Summary of the Impact Assessment Report https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2022:43:FIN
European Commission: Corporate sustainability due diligence https://ec.europa.eu/info/business-economy-euro/doing-business-eu/corporate-sustainability-due-diligence_en
European Commission: Better Regulation: Have Your Say: Public Consultation: Sustainable corporate governance https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12548-Sustainable-corporate-governance/public-consultation_en
European Commission: Press Release, 23/02/2022: Just and sustainable economy: Commission lays down rules for companies to respect human rights and environment in global value chains https://ec.europa.eu/commission/presscorner/detail/en/ip_22_1145
European Commission: Questions and Answers: Proposal for a Directive on corporate sustainability due diligence (23 February 2022) https://ec.europa.eu/commission/presscorner/detail/en/qanda_22_1146
Renew Europe EP Group: Newsroom, 23/02/2022: Due Diligence: Companies must comply with human rights and environment obligations, says Renew Europe https://www.reneweuropegroup.eu/news/2022-02-23/due-diligence-companies-must-comply-with-human-rights-and-environment-obligations-says-renew-europe

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Record URL https://www.europeansources.info/record/?p=525344