EU Member States Vote in Favour of Landmark Corporate Sustainability Due Diligence Directive

After a period of uncertainty, EU member states have made a significant decision, voting in favour of a new law that mandates companies to conduct due diligence on their supply chains. This move is crucial in the ongoing battle against environmental and labour abuses.

The corporate sustainability due diligence directive (CSDDD) received tentative approval from MEPs and government officials in December. However, last-minute hesitations from Germany and Italy raised doubts about its future.

With Italy's recent approval of a streamlined version of the legislation at a diplomatic meeting in Brussels, the law is now on track to be passed. Environmental and social activists who view the regulations as a necessary safeguard against businesses making money at the expense of human rights have welcomed this development.

The European Commission has emphasised harmonising regulations across member states to avoid inconsistencies within the single market.

Belgium, holding the EU Council presidency, has addressed concerns about excessive bureaucracy by increasing the threshold for companies affected by the rules to those with over €450 million in worldwide turnover.

The latest draft of the legislation removed provisions for civil liability, a contentious issue opposed by some countries, such as Finland.

Although the rules still require approval from MEPs, April represents the final opportunity for voting before the June elections.

Lara Wolters, the parliament negotiator from the Netherlands, representing the Socialists and Democrats, has played a pivotal role in this process. She has hailed the Council's endorsement as a significant victory that holds companies accountable for their impact on people and the environment.

However, some remain sceptical, including Angelika Niebler from Germany, a European People's Party member, who raised concerns about the potential indirect impact on smaller businesses and their operations in the developing world.