WWF: Unexpected last round for corporate due diligence law tests EU's credibility
Tomorrow, on 9 February, Member States will decide the fate of the Corporate Sustainability Due Diligence Directive (CSDDD), which would require companies to identify, prevent, mitigate, and end environmental harms and human rights violations within their value chains. The crucial meeting will determine whether the EU can secure a law that benefits companies, markets, affected communities, and the environment alike. If the deal is rejected, the four-year legislative effort to establish an effective law may end up in vain.
The Parliament and the Council reached a political agreement on the law in December 2023, with the larger countries ensuring that their priorities are well-reflected in the deal. Despite this, some conservative voices are attempting to sabotage the new rules by spreading last-minute misinformation and unfounded fears regarding the law’s impact. This includes exaggerating the law’s effect on administrative burdens or SMEs, which are not directly within the law’s scope and are already supported by various measures in the final text.
“The eleventh-hour assaults on the due diligence law seem driven by short-sighted and populist maneuvres, based on a flawed rationale that fails to recognise the law’s value to business, people and the planet,” said Uku Lilleväli, Sustainable Finance Policy Officer at the WWF European Policy Office. “Will the EU help its businesses transition to more risk-resilient and less harmful business models, or will it succumb to misleading notions that competitiveness necessitates the liberty to trample on human rights and the planet? The credibility of the Commission, Council and Parliament – ultimately of the entire EU – is at stake.”
WWF has been critical of the political deal reached by the Parliament and the Member States in the trilogue negotiations in December 2023.[1] While the law would aid firms in transitioning to net zero, the due diligence rules would exclude financial activities from the scope and fall short of effectively addressing corporate abuses on the environment.
Nevertheless, the due diligence law is an essential stepping stone in the EU’s legislative framework, encouraging companies to go beyond mere reporting requirements and to take proactive steps towards more informed, risk-resilient and responsible business practices. A robust law is essential for fostering a stronger EU Single Market, ensuring companies effectively manage sustainability impacts and risks and offering enhanced protection to those affected by harmful economic activities.