In the early morning of 14 December, negotiators from EU Parliament, Council (member states) and Commission reached a political deal on the Corporate Sustainability Due Diligence Directive (CSDDD).

The political agreement on a corporate due diligence directive is a historic moment for human rights in business, despite serious omissions. It creates new protections from corporate abuse for workers and communities, alongside a level playing field for responsible business. After more than a decade of paltry voluntary implementation of the international standards for companies to respect human rights, one of the world’s largest economic blocs has agreed a legal duty for business to address potential and real negative impacts on people, communities, and the environment related to their global operations and value chains.

With rigorous enforcement, this should fundamentally shift the calculus of risk in the boardrooms of irresponsible companies to end their toleration of human rights and environmental abuse in opaque and complex supply chains.

While we still need to see the details, it is disappointing that fierce pressure from parts of the industry appears to have succeeded in eviscerating some key safeguards. One example would be the ‘temporary’ exclusion of financial activities from due diligence when investors and banks play such a central role in defining the behaviour of companies in human rights and environment.

Yet there are important improvements to existing national laws. Scaled up in a European level playing field this will enhance prevention, offer avenues for redress for those harmed, including judicial, and make global value chains more equitable and resilient. We also welcome the requirement to put into effect climate transition plans, recognising enforcement will be key.

The CSDDD responds to the accelerating social and environmental crises of our time, and to ever-growing calls and commitment from global rightsholders including defenders, grassroots organizations, unions, digital rights groups, NGOs, international bodies, European citizens, and responsible voices in business, parliaments and governments. Apparent carve-outs of impacts or activities covered are highly regrettable, will undermine effectiveness and mean certain corporate abuses of human rights and the environment including climate can continue unabated. Nevertheless, yesterday’s milestone is a testament to efforts across political, business and civil society groups for a more sustainable economy.

Next steps

Following this political agreement, technical details will be worked out and then EU Parliament and Council will formally adopt the directive. Afterwards, member states have up to two years to transpose it into national law.

We will keep track of updates and civil society and other reactions to the deal in our ongoing CSDDD Story.