Today, the European Parliament’s committee on legal affairs took some tentative steps toward obliging companies to tackle human rights, climate and environmental risks throughout their global value chains, and to improve access to justice for victims of corporate. However, dangerous loopholes leave the door open for further corporate human rights abuse and environmental harms.

The parliamentarians voted to impose risk-based due diligence obligations on companies as well as strengthen stakeholder consultation requirements; which will more closely align corporate duties with international due diligence standards.

ECCJ policy officer Christopher Patz said: “The draft law removes several obstacles to access to justice, but removing automatic parent company liability keeps a door open for corporate harm. And victims continue to shoulder the burden of proof to demonstrate the failures of corporate due diligence, when it should be up to companies to prove they played by the rules.

There is also a danger that companies will over-rely on outsourced audits and multi-stakeholder schemes with questionable accountability, instead of meaningfully assessing and responding to their value chain risks. Even the corporate climate responsibilities fall far short of the recommendations by the Parliament’s own environmental committee. Given the worsening climate and environmental crises, politicians must take future-oriented decisions –to ensure corporate action on climate and biodiversity.

Financial actors are still being subject to lighter due diligence rules, allowing them to more readily invest in business operations that harm people and the planet.”

A full European Parliament plenary vote on the Corporate Sustainability Due Diligence Directive is expected in May.