In an unexpected turn of events, the EU blocked a proposal on Wednesday that was specifically designed to foster sustainability and responsible corporate behavior within the bloc. The Corporate Sustainability Due Diligence Directive (CSDDD) was intended to safeguard human rights and the environment within the realm of corporate operations and governance.
The proposal had already been adopted by the European Commission back on February 23. The CSDDD specifically mandated that EU member states ensure that companies take appropriate measures to identify actual or potential adverse human rights and environmental impacts. This would apply to their own operations, their subsidiaries, and across their established direct or indirect business relationships – such as those within their value chain. The directive would have had implications for large EU limited liability companies, as well as some non-EU companies.
For the proposal to be adopted, a qualified majority of EU member states must have given their consent. This implies that at least 15 EU countries, representing at least 65 percent of the total EU population, would have had to vote in favor of the proposal. Unfortunately, the necessary support was lacking on Wednesday. According to the Belgian Presidency of the Council of the EU, there will be a review to see if it’s feasible to address the concerns expressed by member states, with a view to possibly bring the proposal back for another voting round.
The UNICEF Representation to EU Institutions expressed that the EU has an obligation to ensure children’s rights are not violated by businesses – an objective that could have been served by the CSDDD. Similarly, the European Coalition for Corporate Justice drafted a joint civil society statement, contributing the failure of the EU Council to pass the CSDDD as a substantial setback for corporate responsibility and the worldwide protection of human rights and the environment.
For more details, you can read the full coverage in the original JURIST article.