April 2023

ENNHRI recommends that European institutions utilise the opportunity during trilogue to adopt a broader approach to due diligence that is based in existing international instruments and best practice standards as already taken up by economic actors.

ENNHRI makes the following comments on the Council of the European Union’s general approach:

1. Personal scope: The scope of the proposed CSDD Directive should be broadened to include financial institutions, and these should be required to undertake due diligence in an ongoing manner.
2. Extent of the due diligence obligations: The CSDD Directive should take a full value chain approach by setting due diligence requirements covering both the upstream and downstream parts of the value chain.
3. Duty of directors: The CSDD Directive should include a clear duty of directors and businesses’ governance structures to commit to the due diligence process and acknowledge the responsibility to respect human rights.
4. Material scope (Annex I): The scope of environmental instruments detailed in Annex I of the CSDD Directive (to be covered by the due diligence process) should be reviewed and potentially extended.
5. Substantive due diligence: The CSDD Directive should clarify that while multi-stakeholder initiatives, third-party verification mechanisms, and contractual assurances can be useful in the due diligence process, they should only be considered as one element of a comprehensive due diligence approach.
6. Stakeholder consultation: The CSDD Directive should provide for meaningful stakeholder consultation and engagement throughout the due diligence process, including at the strategic and design level. However, this should not shift the burden of conducting thorough due diligence onto stakeholders, when this should be the responsibility of companies and use companies’ resources.
7. Civil liability and remedy: In addition to clarifications on prerequisites of civil liability made by the Council, the CSDD Directive should consider and address procedural hurdles faced by victims seeking redress for business-related human rights abuses to ensure an effective access to remedy. The CSDD Directive should also have a broad approach to remedy, beyond only financial compensation