"EU-Member states should agree to EU Due Diligence Directive"

The German Institute for Human Rights urges the German Government and all other EU member states to vote in favour of the EU Corporate Sustainability Due Diligence Directive (CSDDD) in the final vote on 9 February. The EU directive is critical to safeguard and protect human rights and the environment in global supply chains. After lengthy negotiations, the CSDDD may now fail due to disagreements within the German Government and other EU member states.

The CSDDD is intended to finally harmonise national legislation. "If this is not successful, companies in Europe will be faced with a patchwork of national due diligence regulations in the future, combined with more bureaucracy," says Michael Windfuhr, Deputy Director of the Institute. A number of EU member states and neighbouring countries have already introduced supply chain regulations at national level, such as France and Norway, or are in the process of doing so, such as the Netherlands.

The German Supply Chain Act has now been in force for a year. It is too early to make evidence-based statements about the impact of the law on global markets, but company surveys paint a positive picture. According to a representative survey of 2,000 companies in Germany conducted by the Handelsblatt Research Institute on behalf of Creditreform, only seven per cent of companies reject an obligation to comply with human rights and environmental standards in their supply chains.

At EU level, the EU Sustainability Reporting Directive will also come into force from 2024, initially obliging large companies to report on sustainability aspects in a standardised manner. This reporting standard will also apply to companies under the CSDDD, meaning that the additional reporting effort for the CSDDD will be moderate.

The German Institute for Human Rights is the independent National Human Rights Institution of Germany.