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7 Feb 2024

EU: European Coalition for Corporate Justice urges the Council to approve the CSDDD

"The CSDDD is at a make-or-break moment: from fake news to businesses support"

[...] The final text is an inter-institutional compromise with significant concessions made to the EU capitals for an agreed directive ahead of the EU elections. Even so, passing the CSDDD is a pivotal step to shift business conduct to respect people and the planet. [...]

Germany's positioning: A minority party betrays the consensus on sustainability due diligence

Last Tuesday, Germany announced its abstention on the CSDDD, a u-turn decision contrasting Germany’s strong involvement in the negotiations. The fact that Germany abstains is outrageous given the fact that the law was tailored to German interests and legal framework: article 22 on civil liability was heavily rewritten to suit Germany. [...]

This follows an announcement by the FDP-led ministries of Justice and Finance that they intend to block the legislation. This is an assertive internal power move from the smallest party in the coalition – the Freie Demokratische Partei (FDP), currently polling at just 4% of popular support in Germany. [...]

In fact, in his competency over the decision-making process, Scholz could have defended the original coalition agreement that explicitly supported an effective EU Directive aligned with international standards. [...]

However, it’s important to emphasise that German abstention does not mean the end of the CSDDD. Council and all EU capitals must vote and approve the final text.

Backlash from German businesses: CSDDD abstention not in our name

Now, Buschmann faces backlash from small, medium and large German businesses who are “deeply concerned” about a potential German CSDDD abstention, and call for the passage of “the democratically achieved compromise to thereby provide companies with legal certainty and fair competitive conditions”. Moreover, a recent article by the German investigative journal Spiegel also shows that 51% of interviewed companies expect “rather positive” long-term financial impacts from the CSDDD, with 20% expecting “very positive” impacts.

The FDP has also waged a disinformation campaign using fake news in their claims against the CSDDD, bringing old but incorrect myths of the impact of the Directive on small businesses, and incorrectly claiming that they are defending a united German business front against the Directive. But German businesses have responded to this stance that it is not in their name. [...]