CSDDD rule secures European Parliament approval

June 7, 2023

The EU Corporate Sustainability Due Diligence Directive (CSDDD) has secured approval from the European Parliament.

The directive means that companies will now be required to implement climate transition plans and disclose the impact of their value chains on human rights and the environment.

The new legislation will require all large EU companies and global companies with significant EU revenues to oversee the impact on human rights and environmental issues in their supply chains.

The Parliament voted 366 to 225 votes in favour of the landmark legislation.

Early reactions from various civil society organisations, such as Amnesty International and ECCJ, are overall positive while pointing out that certain provisions could have been stronger.

Welcoming the intention of the directive and the message it sends, Hannah Storey, Amnesty International policy advisor on business and human rights, said: “There are some troubling exemptions in the legislation which would make it very challenging to hold financial sector firms liable under civil law for human rights abuses and environmental harms.”

She added: “Companies also do not have to consider possible human rights abuses stemming from the misuse of their products. EU policymakers must urgently address these omissions during negotiations.”

Christopher Patz, policy officer at the ECCJ, commented that the emphasis would now be on what happens next within the legislative process.

“Eyes are on the EU to set the standard for how companies are expected to act,” he said.

“It’s imperative that in the upcoming trialogue, Parliament defends what progress has been made on access to justice, closes the loopholes and creates a strong due diligence law that can stand the stress test of social, ecological and geopolitical pressures.”

The version passed by parliament will now be reconciled with those being considered by the EU Council and the EU Commission.

After this, a final text on the legislation is set to be produced later this year.

The law faced last minute opposition, including an amendment tabled by German conservative MEP Angelika Niebler that would mandate the European Commission to convert the directive into a regulation six years after its implementation.

The directive comes after the European Parliament voted last month to support a proposed ban on environmental claims that are based solely on carbon offsetting schemes.