On Monday, 28 November, the Economy for the Common Good (ECG) and 50 other civil society organisations co-signed a letter to the ministers of the EU memberstates for ensuring an effective Corporate Sustainability Due Diligence Directive, asking them to take a constructive position that protect human rights, the environment and climate.
The letter welcomes the efforts of governments to act quickly and commends the outstanding leadership of the Czech Presidency on delivering a workable text. However, rather than living up to international standards and strengthening the European Commission’s proposal, some parts of the draft law have been dramatically weakened while under discussion in the Council. The current text presents a few improvements but also major flaws.
A compromise text, as reported by the press, shows that many types of financial services, large institutional funds and asset managers would not fall under the scope of the directive in the latest version of the text. In the Commission’s original version, all large financial companies were covered. On the other hand, the directive should apply only to a company’s supply chain or its entire value chain. Some member states are pushing to limit rules to a “chain of activities” that encompasses a company’s supply chain as well as “the distribution, transport, storage and disposal of the product”. This would still leave out downstream activities of weapons or pesticide producers, for example.
The Council’s proposal would also curtail the scope of human rights, fail to guarantee access to justice, and fall short of improving provisions on environmental and climate due diligence.
The letter reminds ministers that over half a million citizens demanded a strong directive obliging companies to respect human rights and the environment, and take decisive climate action. In addition, over 200 civil society and trade union organizations have been clear on how to strengthen the text in line with public demands.
We urge EU ministers to use their vote on 1 December in favor of a general approach that:
- Covers the full value chain, including downstream impacts and the full coverage of the financial sector;
- Expands the scope of rights and impacts covered, including climate impacts and concrete transition plans;
- Strengthens access to justice and addresses barriers to justice often faced by claimants in business-related human rights and environmental cases.
The directive has the potential to be a win-win for citizens, companies, states and the planet. If robust, these rules will contribute to a resilient economy by improving quality of life for workers, prevent economic and climate crises, and enable social and economic justice.
Image credits: @dusan-cvetanovic / pexels
