In a significant setback, the EU's proposed Corporate Sustainability Due Diligence Directive (CSDDD), aimed at making large companies accountable for social and environmental impacts, has faced opposition, halting its progress.
The Corporate Sustainability Due Diligence Directive (CSDDD) is a major piece of EU legislation that will require EU and non-EU companies to conduct environmental and human rights due diligence across their operations, subsidiaries and value chains.
The CSDDD needed support from 15 EU countries, representing 65% of the EU population, to move forward in the European Parliament. However, some member states believed the law would create too much bureaucracy for businesses, leading to a deadlock. Despite attempts by Belgium (holding the EU presidency) to gather support for the law, it was withdrawn.
More than 130 European organizations have expressed disappointment and called on the Belgian Presidency to intensify efforts to secure support without compromising core principles. The failure to approve the CSDDD is a setback for corporate responsibility, human rights, and environmental protection, posing a threat to crucial sustainability legislation and hindering efforts to promote responsible business practices.
For businesses specialising in risk management, such as WieldMore, clear regulatory frameworks not only enhance corporate responsibility but also increase data transparency, allowing for better visibility and management of environmental and governance-related risks. Implementing such directives would significantly benefit risk management by making essential sustainability data publicly available, aiding in the identification, mitigation and peer level benchmarking of emerging financial risks associated with corporate planning.
In the face of this setback, it is imperative for EU member states to return to the negotiation table with renewed urgency. Protecting human rights and the environment is a priority for the EU, and it must be approached in a manner that ensures no damage is inflicted on the business agenda and competitiveness.
