CSDDD Hangs in the Balance – What’s at Stake?
Despite political agreement on a revised version of the proposed Corporate Sustainability Due Diligence Directive (CSDDD) being reached between the European Parliament and the European Council in December 2023, a confirmatory vote scheduled to be held in the Council on February 9 was postponed twice, the second time without a new date set, after the German liberal party (FDP) forced the country’s coalition government to announce that it would abstain from voting.
This article explores what is now at stake for the future of corporate sustainability due diligence in the EU. It notes a number of key areas where CSDDD goes beyond the requirements of the EU’s Corporate Sustainability Reporting Directive (CSRD) (which CSDDD was intended to complement), which took effect in January 2024 and requires companies to report on their sustainability due diligence processes. It asks whether, contrary to the FDP’s assertion, corporate interests may in fact be best served by the adoption on an EU harmonised regime on corporate sustainability due diligence.