“Watered down” CSDDD approved by EU Committee

March 22nd, 2024

The European Parliament’s Legal Affairs Committee has voted in favour of the Corporate Sustainability Due Diligence Directive (CSDDD), amid criticism that the proposals were weakened by EU member states.

The committee’s vote is a crucial hurdle in the path for the rules to become law, which will then require companies to address their negative impacts on human rights and the environment across supply chains.

They will set a standard for companies to identify, prevent, mitigate, and account for environmental impacts and human rights abuses from their supply chains and sourcing operations.

Following the approval of the Committee, the proposals will now be voted on by all MEPs in April.

The rules were first proposed in February 2022, but the EU Council failed to approve them earlier this month.

Countries including Germany and Italy objected to the rules, meaning the proposals failed to achieve final approval from the Council. These proposals were criticised over the potential bureaucratic and legal impacts they could have on companies.

This, alongside criticism from businesses over the scope of the reporting requirements, led to several amendments being added to the proposals, including a reduction in the scope of companies covered.

Hannah Storey, Amnesty International’s policy advisor on business and human rights, said: “It is disappointing that this legislation has been significantly watered down by some member states at an unusually late stage in the EU legislative process.

“While it is a relief that the legislation has survived attempts to kill it off completely, some states have eroded the text so that the CSDDD in its current form falls short of original aspirations. It will now only apply to the very largest businesses, meaning almost 70 per cent of the companies it would have covered in its previous draft will now be exempt.”