The European Parliament and the Council of the European Union today reached an agreement to require large companies operating in Europe to conduct human rights and environmental due diligence over harms in their value chains. The proposed EU Corporate Sustainability Due Diligence Directive (directive) represents a long-awaited commitment by EU governments to no longer tolerate irresponsible business conduct and help protect rightsholders globally. But serious gaps in the directive’s alignment with international standards including the OECD Guidelines underscore the need for more government action to ensure policy coherence and accountability for corporate harms.

New duties for companies to address human rights and environmental abuse ...

New measures to strengthen accountability and remedy for victims ...

Gaps in alignment with the broad scope of the OECD Guidelines
Notwithstanding many strong elements, the directive falls seriously short of alignment with the broad personal, subject matter, and value chain scope of the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct (OECD Guidelines). For example:
• Limited coverage of financial sector...
• Weak duties on climate impacts...
• Limited downstream scope...
OECD Watch calls on governments to strengthen implementation of the Guidelines’ recommendations, not only by National Contact Points, but also through continued pursuit of stronger law and policy on responsible business conduct. OECD Watch is pleased that the European Commission has committed to developing a separate due diligence directive for the financial sector. OECD Watch urges prompt next steps in this regard and in the other areas of non-alignment in the directive’s text...