(Friday 15th March) Today EU Ambassadors gave the green light to the Corporate Sustainability Due Diligence Directive (CSDDD), following multiple delays.
Commenting on the outcome, Isabella Ritter, EU Policy Officer at ShareAction, said: "Today’s vote marks a watershed moment for corporate accountability, ushering in a new era where businesses will be required to take action against labour abuses and environmental pollution.
“Yet the last-minute changes made to appease some member states have substantially reduced the scope of what the CSDDD could have achieved. Slashing by more than half the number of affected companies that the legislation will apply to severely undermines its original intentions, failing both people and planet. Additionally, by phasing in the limited measures agreed upon today, we are unlikely to see tangible results for almost a decade, leaving vulnerable workers at risk and jeopardising our planet and its vital ecosystem.
"In introducing these changes in the final weeks of negotiations, EU leaders clearly prioritised political gamesmanship over the interests of business, civil society and consumers.”
While these revisions weaken the directive's strength, having the first EU wide corporate accountability law is a significant step forward. ShareAction therefore urges lawmakers of the European Parliament to a swiftly adopt the revised text before the European elections.
Notes to editors
After several postponements, the Belgian Presidency of the Council has come forward with a set of proposals to modify to compromise text of the CSDDD. The changes aimed to secure the support of the majority of EU member states, by increasing the thresholds for the scope of application, from 500 to 1000 employees and from 150 to 450 Euro million turnover. A three-stage phase-in approach was also introduced, with the Directive applying to all in-scope companies only five years after entry into force.
Additionally, the Council removed the list of high-impact sectors, further narrowing down the scope and coverage of the directive. Changes to the value chain include the removal of disposal and recycling responsibilities for businesses and the exclusion of indirect business relationships.
Regarding the financial sector, the Joint Political Statement, which states the commitment on the side of the co-legislators to include future due diligence rules for financiers, has been deleted. Besides, the EU Member States got rid of the financial incentives linked to the implementation of the transition plan to combat climate change.
