The Commission proposal is a good basis, but it must be improved by the Parliament and Member States to really make a significant contribution to better sustainability due diligence:
- Sustainability due diligence should cover the whole value chain (upstream and downstream), in a risk-based and proportionate manner.
- Sustainability due diligence should cover all human rights and environmental impacts (including climate) as provided for in the international agreements to which the directive proposal refers.
- Sustainability due diligence (and reporting) should be extended to all companies which fall under the obligation of financial reporting.
- Sustainability due diligence should consider the perspective of those affected based on their affectedness and meaningful consultation of stakeholders in all phases of due diligence processes.
- Company boards should be required to integrate sustainability risks and impacts into their corporate strategy, risk management, control and compliance systems.
- Variable remuneration for board members should be linked to the company’s sustainability performance.
- The burden of proof must be on the company to demonstrate whether it acted reasonably or not.
Recommendations on the Corporate Sustainability Due Diligence Directive
- A holistic and consistent approach towards CSRD, CSDDD and SFDR should be favored
- Strengthened by implementing a set of concrete recommendations developed by ECG together with other civil society organizations (CSOs) to close the gaps created by the shortcomings collectively identified. In addition, ECG calls on policymakers to elevate the level of ambition of the proposal through the integration of two additional suggestions: one to strengthen global governance (A) and the other to promote responsible purchasing practices (B).
- The CSDDD could help redefine the social role of companies.
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