The E.U. CSDDD - What is left after compromise?

The E.U. CSDDD – What is left after compromise?

  • Published on
    March 15, 2024
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  • Category:
    Law & Policy, Supply Chain
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After extensive negotiations and a near-failure to be passed, the European Council Committee of Permanent Representatives (COREPER) and the European Parliament Committee on Legal Affairs (JURI) passed the Corporate Sustainability Due Diligence Directive (CSDDD) – but the scope of the law has been significantly slashed.

What is left of the CSDDD?

The CSDDD was originally agreed upon in December 2023 and aims to “stop businesses from looking away from very real human misery and destruction,” as declared by Lara Wolters, Dutch MEP, and lead negotiator via The Guardian. However, complications arose when key member states started turning their back on the directive, reaching a peak of frustration when a vote in the COREPER failed back in February.

The Belgian government, holding the current rotating presidency of the EU Council, re-entered negotiations and managed to secure a new compromise for the law – at a significant cost.

So, what is left of the law?

  • The updated agreement now covers companies with over 1,000 employees, increased from the initial 500, and with a net turnover of €450 million, three times higher than previously agreed upon. This excludes as many as 70% of the companies originally meant to be covered.
  • The scope of activities under due diligence obligations has been further reduced. It does this by omitting responsibilities related to product disposal, dismantling, recycling, composting, and landfilling. As a result, companies are not required to identify or address potential risks and damages associated with these end-stage activities.[1]
  • The idea to give bonuses to directors for leading their companies to be more environmentally friendly was taken out. This means there’s one less way to push for quicker action towards sustainability, even though companies still have to plan to do better for the climate.[2]

Reactions from civil society

Campaigners, human rights, and environmental activists have been disappointed by the changes made, including ourselves.

“The EU countries endorsed the much-needed due diligence law, but at what cost? We’re left with bare bones, with an already weak framework that now covers only a fraction of all large companies.” – Uku Lilleväli, World Wildlife Fund

“EU Member States have finally lifted the roadblock on European Due Diligence. We welcome it – but it is far from being good enough. Victims of corporate abuse still face many obstacles to justice and access to European courts. Companies still don’t have enforceable climate emission reduction obligations. EU policymakers can’t let momentum drop now. National governments now need to use CSDDD as a springboard for European leadership in defending justice over profit.” – Paul de Clerck, Friends of the Earth Europe

“[The] endorsement of the CSDDD is a significant landmark recognition toward regulating businesses to uphold human rights and environmental standards. The CSDDD will set the ground for responsible business conduct within the EU and beyond. But it is far from a resounding victory for victims and advocates: the endorsed compromise falls short of the ambition of the original trilogue agreement due to last-minute, undemocratic manoeuvres by Member States, who have once again betrayed those they should protect from corporate harm.” – Nele Meyer, European Coalition for Corporate Justice

While we wish for better, we also recognize some measure of progress has been made.

The CSDDD is now awaiting a vote in the European Parliament plenary on April 24th before heading back to the Council for a final vote. It is not yet too late for member states that abstained to change their minds – including Germany. Sign the petition now!




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