May 2022

The negative impacts of corporate activities on human rights and the environment are not the hazardous and occasional externalities of business activities; they are the consequence of an economic system that puts profit over people and extraction of wealth over care for the planet, even in the context of an epochdefining climate crisis. For too long, decision-makers and business leaders have asked us to trust the market and the rationality of economic actors. Yet, we are faced with the irrational reality of business as usual...

The European Commission (EC)’s Corporate Sustainability Due Diligence (CSDD) proposal represents an important step towards meaningful legislative actions to address the threat of corporate activities to human rights and the planet. However, it will fail to trigger transformative and significant changes if major shortcomings of the text are not addressed. In particular, the law needs to move away from a bureaucratic approach to prevention and termination of the harmful risks and impacts of corporate activities and it should instead align with the risk-based approach already set in international standards. In the proposal, a companies’ obligation to prevent harm focuses too much on contractual clauses and certification mechanisms, which have proven to be highly ineffective. While the proposal establishes the civil liability of companies for harm they cause by failing to comply with due diligence obligations, it fails to address the imbalance of power, resources and information between companies and claimants. Thus, it fails to ensure meaningful access to justice.

Most importantly, the voices of those who have survived and experienced corporate abuse, human right defenders, indigenous people and women on the frontline are almost entirely absent from the proposal...