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ENNHRI Statement in the Context of the EU Trilogue Concerning the EU Corporate Sustainability Due Diligence Directive
This statement follows previous statements of ENNHRI following the publication of the Commission’s proposal and the Council’s General Approach. ENNHRI makes the following recommendations with a view to inform the trilogue negotiations:
- Substantive due diligence: The substantive due diligence obligations should be based on a risk-based approach to due diligence. Appropriate measures must be defined as context specific and, as proposed by the Parliament, designed to be effective in reducing human rights and environmental impacts.
- Extent of the due diligence obligation: It is vital that the scope of due diligence a company is required to undertake includes impacts which arise not only in the upstream but also in the downstream part of the value chain. Omitting downstream activities can lead to severe human rights impacts not being properly considered by a company, which necessitates a definition of scope that moves beyond the three positions proposed.
- Civil liability, administrative supervision and remedy: The CSDD Directive should provide for civil liability for all harms which occur as a result of due diligence failures and address hurdles rightsholders commonly face when seeking redress, including legal standing, access to information, evidence barriers, legal costs, the length of proceedings, and limitation periods. Supervisory authorities should have broad powers to enforce the CSDD Directive, complementary to judicial review. The Directive should emphasise the need for companies to remediate and clarify that remediation can take different forms.
- Financial institutions: In line with international standards, financial institutions should undertake due diligence throughout their economic activities, including in respect to the provision of financial services and investment activities. To account for the particularities of investor-investee relationships, the EU legislator may specify what measures are appropriate in this specific context, as proposed by the Parliament.
- Stakeholder engagement: Meaningful engagement with stakeholders and particularly with rightsholders should be embedded throughout the due diligence process along the lines of the Parliament’s position requiring not only engagement to properly identify impacts and determine appropriate measures, but also proactive communication and the provision of relevant information.
- Material scope: Companies can impact the full spectrum of human rights and for that reason, they should identify adverse impacts against all recognised human rights and environmental instruments in line with the approach of the UNGPs.
- Corporate governance, strategy and business model: The CSDD Directive should require companies to take human rights considerations into account when making decisions, also at the highest management level, as put forward in the positions of the Commission and the Parliament.
- Personal scope: The scope of application of the Corporate Sustainability Reporting Directive and the CSDD Directive should match to ensure alignment between the substantive due diligence obligations and the complementary reporting requirements...