EU Council Fails to Approve New Environmental, Human Rights Sustainability Due Diligence Law

(The picture dates back to August 2023, when Germany was still ‘green’ and things were looking favourable for CSDDD).

The text of the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) failed to secure a qualified majority among member state representatives on Wednesday.  The Corporate Sustainability Due Diligence Directive has faced rising opposition since the final draft was released on January 20. Ultimately leading to failure to achieve final approval by the European Council, following objections from countries including Germany and Italy, despite a provisional agreement on the regulation reached earlier by the Council with the EU Parliament.

The setback to the corporate sustainability due diligence directive (CSDDD), follows a four-year process to advance the regulation, beginning with studies by the European Commission in 2020  on directors’ duties and sustainable corporate governance and on due diligence requirements in the supply chain, leading to the Commission’s proposed CSDDD draft in February 2022, setting out obligations for companies to identify, assess, prevent, mitigate, address and remedy impacts on people and planet – ranging from child labour and slavery to pollution and emissions, deforestation and damage to ecosystems – in their upstream supply chain and some downstream activities such as distribution and recycling.

The CSDDD is currently facing a ticking clock as the European Union is set to hold elections in June. The European Parliament must approve the CSDDD by March 15 for it to be adopted prior to the elections.