The proposal on corporate sustainability due diligence, presented by the European Commission in February 2022, would require large companies and small and medium-sized enterprises (SMEs) in high-risk sectors to prevent human rights violations and identify “adverse environmental impacts” along their value chain.

On Thursday, MEPs from the environment committee adopted their opinion on the file, calling for stricter obligations on environmental and climate impacts for companies, including requirements to reduce their carbon emissions, in line with existing EU law.

“The environment committee is sending a strong signal: we want to oblige companies to make their entire value chain climate-neutral by 2050,” said Tiemo Wölken, rapporteur for the opinion, following the vote.

“No company should be able to relocate its particularly climate-damaging activities to countries outside Europe in order to circumvent the strict climate regulations in Europe,” he added.

According to the opinion, companies would need to make sure that their value chains are aligned with the objectives of the Paris Agreement and the European climate law. Moreover, the opinion lays out the criteria for mandatory transition plans that companies would need to implement to reach these goals.

One of the main achievements on the file is the addition of new environmental categories, which strengthen the definition of adverse environmental impact, according to the rapporteur.

New conventions safeguarding the environment are also taken into consideration, including the convention for the protection of the sea (UNCLOS), access to justice in case of environmental damage (Aarhus), and the New Montreal convention on biodiversity (COP). 

NGOs and activists, who have been campaigning for more environmental and climate due diligence obligations under the proposed rules, were pleased by the vote...

The legal affairs committee, leading the work on the file, is expected to vote on the final report by March, while the Parliament should vote on it during the plenary session in May. Negotiations with the Commission and the Council should then start in the summer.

In January, several committees voted on their opinion on the proposal, calling on the Commission and member states to strengthen requirements for companies and cover the financial sector, after its inclusion was left optional in the Council’s initial position agreed upon in December.