EU governments are currently debating whether to approve the draft corporate sustainability due diligence directive...

One of the main obstacles to approval seems to be its potential impact on small and medium-sized businesses, although financial and other support could be provided to them. This delay is frustrating for those around the world who are adversely affected by business activities that abuse human rights, damage the environment and have an impact on climate change...

It is also disappointing for the many businesses that are calling for such a law. They wish to have legal certainty, harmonisation across their operations and to be able to protect their reputation — as well as to enjoy support from the law when a product produced by a rival is cheaper in price through use of forced labour or after environmental destruction. Such laws also give businesses clarity in decision-making, such as how to approach operations in conflict-affected regions, where to place investments and how to manage a just transition to renewable energy.

A key part of the reason for this legislation is the growing awareness among governments, civil society and companies themselves that business does have responsibilities for human rights abuses...

[E]xisting legislation and regulation already requires some businesses to disclose activities that have actual or potential adverse impacts on human rights. Unlike the UK’s Modern Slavery Act, a few of these pieces of legislation have real sanctions against businesses for non-disclosure of abuses, and these have been shown to be more effective than legislation without enforcement. Indeed, EU legislation already provides for this in some areas, which makes the delay in approving the draft directive even more puzzling...