'The Unintended Consequences of Mandatory Due Diligence The Importance of Supportive Measures in the EU Corporate Sustainability Due Diligence Directive'

The EU Corporate Sustainability Due Diligence Directive (CSDDD) seeks improvements in companies’ societal impacts...

However, the risk is that in-scope companies will “transfer” obligations to their business partners (Preamble 66). To avoid that, the CSDDD establishes the principle of shared responsibility...

A multitude of measures... account for the vulnerability and risks faced by SMEs and the general aim is “to mitigate financial or administrative burden on SMEs” (preamble 69)...

Protective measures seek to avoid in-scope companies harming a direct or indirect business partner as they seek to comply with their CSDDD obligations. Four modalities are highlighted so companies desist from problematic practices...

Supportive measures refer to measures that in-scope companies as well as the states should take to assist direct and indirect business partners. CSDDD outlines four modalities to assist business partners and other stakeholders. It adds clarity by identifying forms of support, including financial support...

In its mitigatory measures, the CSDDD makes notable advances. The CSDDD appears focused mainly on protecting and supporting “indirect partners” and vulnerable SMEs, as well as assisting in-scope companies with a helpdesk (Art.21). There are also various provisions in the CSDDD referring to NGOs, defenders, and National Human Rights Institutions; these actors with a critical role to play and have received support through development cooperation focused on advancing corporate accountability. Facilitating exchanges and new collaborations in this ecosystem of capacitated actors should be a priority...

This blog is part of the symposium "Unboxing the New EU Corporate Sustainability Due Diligence Directive" organised by Verfassungsblog and the German Institute for Human Rights.