Coreper calls for sustainable companies

On May 15th, one step towards companies’ welfare was made. The Permanent Representatives Committee of the Council (Coreper) approved the text on the directive that will provide a framework for European corporate due diligence, but not without several important changes.

What are we talking about

On 23 February 2022, the Commission submitted the proposal for the directive on corporate sustainability due diligence to the European Parliament and to the Council.

The acronym CSDDD of the directive stands for Corporate Sustainability Due Diligence Directive. It represents a directive that aims to eliminate in companies their negative impact on child labour, slavery, pollution, or any form of abuse of human rights and the environment.

Before the final approval from Coreper, the directive struggled to reach the majority of the EU institutions. After the agreement reached by the European Parliament and the Council in December 2023, something unusual happened. Member States’ ambassadors to the European Union (‘Coreper’) did not approve the text presented by the two EU institutions. On February 28th, Coreper couldn’t reach the majority based on the text presented.

Some changes

At the moment, the final text of the directive represents a notable dilution of its initial ambition. The directive now applies only to companies with over one thousand employees, and it omits certain high-risk sectors altogether. This has raised concerns about the legislation’s effectiveness in promoting comprehensive due diligence practices. Nevertheless, the incorporation of the UN Guiding Principles on Business and Human Rights into EU law marks an important step toward mandating environmental and human rights due diligence within corporate value chains.

After multiple adjustments to the final text of the legislation, the European Parliament gave its final word and on April 23rd, the CSDDD was approved. Then the Coreper followed the lead and approved the final text too.

The next step will be the approval from the Council on May 23rd with the EU Ministers. Then the Official Journal of the European Union will publish the final text. As the legislation is a directive, member states have two years to transpose the European directive into national legislation.