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8 Jun 2022

Friends of the Earth Europe, Corporate Europe Observatory & Friends of the Earth Germany (BUND)

EU: Report says pro-corporate voices succeeded in postponing & weakening proposed due diligence law

"Big business derails corporate accountability law for human rights abuses and climate crimes", 8 June 2022

Our new report, written together with lobby watchdog Corporate Europe Observatory (CEO) and Friends of the Earth Germany (BUND) has uncovered the astonishing extent to which pro-corporate voices – from within and outside the European Commission (EC) – have succeeded in postponing and weakening a proposed EU law which seeks to hold big business accountable for human rights abuses and environmental damage...

Initially outlined in October 2020, it was urgent and ambitious until it was the subject of a campaign waged by business lobbies in Denmark, Sweden, Germany, France, and elsewhere. The Commission’s final proposal, published in February 2022, represents a worrying dilution of original ambition.

The final Corporate Sustainability Due Diligence (CSDD) proposal gives companies lots of options to escape liability and makes it extremely difficult for victims to prove that a company acted wrongly. Far fewer companies are covered by the law and it excludes significant parts of the value chain. It also fails to make climate action part of companies’ due diligence obligations and doesn’t include obligations for short, medium, and long-term emission reduction targets. Nor does it allow companies to be taken to court in cases of failure to reduce emissions.

And it was the role played by the Commission’s own Regulatory Scrutiny Board (RSB) that ultimately secured this outcome. The RSB is made up of unelected officials who are charged with ensuring that new EU legislation does not damage business ‘competitiveness’ or become too ‘burdensome’. This approach risks sacrificing the social and environmental benefits of legislation to accommodate business interests.

When the final proposal was published environmental groups, consumer associations, human rights groups and trade unions alike all cried foul.

The European Parliament must urgently take steps to ensure that the CSDD proposal recovers its original ambition to hold business to account for abuses in its supply chain: the deregulatory nature of the Commission and the RSB need to be entirely re-thought.