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9 Oct 2023


Aligning the EU Due Diligence Directive with the International Standards: Key Issues in the Negotiations

October 2023

... [I]t is not surprising that the positions of the institutional negotiators have increasingly built on the core concepts in those standards [of the UNGPs and the OECD Guidelines] as the process has moved forward. Not only have they been shown to work in practice – for the CS3D to diverge from them would risk creating a fragmented approach that is out of step with the global consensus these standards reflect and that would lead to confusion for companies that have been working to implement them for over a decade now.

This crucial phase of negotiations is a vital opportunity to align the CS3D with the core concepts in the international standards. In this snapshot, Shift takes stock of where progress has been made – and where work still remains – to ensure greater alignment between the positions of the three EU political institutions – the Commission, Council and Parliament – and the international due diligence standards...

This note covers 12 key issues at stake in the trilogue negotiations on the CS3D regarding the extent of the alignment of the final text with the international due diligence standards. The issues are grouped in three clusters:

  • Scope of the due diligence duty:
    • Companies subject to the duty
    • Coverage across the value chain
  • Elements of the due diligence duty:
    • Involvement framework
    • Risk assessment and prioritization
    • Risks connected to business model and strategy
    • Using leverage, including through disengagement
    • Remedy and grievance mechanisms
    • Engagement with affected stakeholders
    • Due diligence by financial institutions
  • Enforcement and accompanying policy measures:
    • Civil liability
    • Administrative supervision
    • Accompanying policy measures

Each section sets out what the international standards (especially the UNGPs) expect on each issue, identifies positive elements in the Commission, Council and Parliament positions, and identifies where further alignment is needed...