European Union (EU) Member States have finally reached an agreement on the Corporate Sustainability Due Diligence Directive (CSDDD), a text weakened by significant last-minute maneuvering, but which represents a historic step forward for human rights and the environment.

The landmark text requires companies to prevent and address human rights and environmental impacts in their value chains. For many years, civil society has been calling for an improved European regulatory framework that outlines companies’ due diligence obligations with respect to human rights, the environment and climate, and establishes monitoring and access to justice mechanisms.

However, last-minute concessions have significantly weakened the text. The number of companies covered is marginal compared to the number of actors that pose risks to rights and the environment: only 5,500 very-large companies (0.05% of European companies) would be covered by the directive.

"This is a positive step towards a better protection of human rights and the environment. However, it is a shame to see such a lowering of ambitions. The Directive’s impact on victims and on populations affected by investment projects risks being too limited, and the exclusion of entire sectors deprives us of important levers", said Maddalena Neglia, Director of International Federation for Human Rights’s Business, Human Rights and Environment Desk.

...Other last-minute concessions include the exclusion of part of the value chain, such as dismantling and recycling operations, from the due diligence obligation, and the removal of incentives for climate transition plans...