The EU Due Diligence Law Proposal is Out
The proposal addresses the legal fragmentation in Europe concerning environmental and human rights due diligence.
CSR Europe members received a practical summary on the impact of the proposal.
Companies are invited to join the open webinar “EU Update on the Due Diligence Law“ on 10th March to hear from the European Commission about the new EU requirements
On 23 February, the European Commission published its proposal for a Corporate Sustainability Due Diligence Directive, aimed at achieving the goals set by the European Green Deal and the Paris Agreement.
The document is necessary to address the legal fragmentation in Europe and the human right, environmental, and climate change issues present along the value chains of both EU and third countries parented companies.
The proposed Directive aims to:
Improve corporate governance practices to better integrate risk management and mitigation processes of human rights and environmental risks and impacts.
Avoid fragmentation of due diligence requirements in the single market.
Increase corporate accountability for adverse impacts.
Improve access to remedies for those affected by adverse human rights and environmental impacts of corporate behaviour.
Offer a horizontal instrument focusing on business processes.
As of 2025 for large companies and 2027 for medium companies working in high-risk sectors, corporate directors will have a “duty of care”, which includes 5 main actions to take:
Integrate due diligence into their corporate policies
Identify actual or potential adverse impacts
Prevent and mitigate potential adverse impacts
Establish and maintain a complaints procedure
Monitor the effectiveness of their due diligence policy and measures
Publicly communicate on due diligence
In case companies fail to comply with the new rules, they will be considered accountable for any adverse impact arising as a result of their activities. Victims will be able to bring a civil liability claim against companies, and this civil liability concerns companies’ own operations and its subsidiaries and established relationships with which a company cooperates on a regular and frequent basis.
WHAT’S THE IMPACT OF THE PROPOSAL ON YOUR COMPANY?
CSR Europe prepared and disseminated for its members a practical summary on the impact of the proposal on companies.
Furthermore, on 10th March, organisations are invited to join the open webinar “EU Update on the Due Diligence Law”. For the occasion, CSR Europe will welcome representatives from the European Commission (DG Grow and DG Intpa), businesses, and governments that will present and discuss the recent development around the proposal for an EU Mandatory Due Diligence Law.
CSR Europe with its members and National Partner Organisations, will also further dialogue with the EU institutions to make article 14 on “Accompanying Measures” more robust.
NEXT
The proposal will be presented to the European Parliament and the Council for approval, and once adopted Member States will have two years to transpose the Directive into national law.
The initiative is also mentioned in the Communication on Decent Work Worldwide, published on the same day and reaffirming the willingness of the European Union to promote decent work within the Union and around the world, also through a future “Product Ban”. The document focuses on mapping the current and forthcoming European initiatives and strategies on the topic, and introduces some internal and external policies for the EU to promote decent work as a global leader.
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