Commentary: Strong corporate climate obligations are a win-win-win for the environment, economy and EU. Here’s why.
[T]he Corporate Sustainability Due Diligence Directive (CSDDD) [...] raises high expectations but it seems there are pages missing from the draft: among them the obligation for businesses to do due diligence in line with the Paris Agreement is conspicuously absent...
Governments are failing to take climate change seriously: To curb company emissions at the scale needed to rapidly decarbonise across Europe, the CSDDD could be a crucial tool by setting in stone that businesses must cut their emissions.
Companies are responsible for the vast majority of greenhouse gas emissions worldwide. Since that statistic was published in 2017, voluntary corporate commitments for a climate-friendly industry transition have become as prevalent as air pollution. And yet the EU fossil and banking sectors are currently preparing to spend $103m a day for the rest of the decade on ‘carbon bomb’ projects that blast through the EU’s own estimated carbon budget.
Major fossil fuel companies have invested millions in climate denial advertising, lobbying to water down climate legislation, and 97% of short-term expansion plans involve further oil and gas exploration...
The current CSDDD text proposes that companies have to develop a transition plan, but there is no obligation for them to actually implement it. While the European Parliament wants to require companies to implement these plans, some national governments like France and Germany are resisting efforts to make the implementation mandatory. To most of us this might sound absurd: you oblige a company to make a plan, but they are free to ignore the plan afterwards. This way the Council is setting up the CSDDD to be yet another greenwashing exercise.
An effective CSDDD must include a duty for companies to implement climate transition plans including reductions for all emissions linked to a company’s business operations (including upstream and downstream) in line with the Paris Agreement targets and other key elements mentioned in Article 15 of the Parliament’s proposal. And crucially, they must be subject to civil liability if they don’t implement said plans. People affected should be able to take companies to court for failing to reduce their emissions. Again, the Council is blocking this and wants to let free-riders off the hook.
These plans must be for an absolute reduction in emissions...
A strong climate commitment in the CSDDD would also level the playing field for companies by aligning climate responsibilities across sectors.