Corporate sustainability due diligence: Could value chains integrate human rights and environmental concerns?

Briefing 16-05-2022

Companies can play a key role in building a sustainable economy and society, and in furthering environmental goals. At the same time, their global value chains may pose risks to human rights and the environment. Civil society, governments and companies are increasingly aware of the issue. A growing number of EU companies have taken initiatives to deploy due diligence processes, often using the existing international voluntary standards on responsible business conduct. Some Member States have started developing their own legal frameworks on corporate due diligence. To avoid fragmentation and to provide legal certainty to business and citizens, the Commission has proposed a directive laying down rules on corporate due diligence obligations (including on climate change), directors' duties, civil liability and protection of persons reporting breaches. Supervisory authorities designated by the Member States would be in charge of enforcing the new directive. It would be aligned with international standards on human rights and environmental protection. The Parliament had already called on the Commission to introduce mandatory due diligence legislation in a legislative-initiative resolution of March 2021. It will now examine the Commission proposal following the ordinary legislative procedure. First edition. The 'EU Legislation in Progress' briefings are updated at key stages throughout the legislative procedure.