CORPORATE SUSTAINABILITY: RULES OF DUE DILIGENCE TO RESPECT THE ENVIRONMENT AND HUMAN RIGHTS
Businesses play a key role in creating a sustainable and fair economy and society, but they need support in the form of a clear regulatory framework. European business sustainability due diligence legislation will advance the green transition and protect human rights in Europe and beyond
Sustainability is anchored to the values of the EU and companies are committed to respecting human rights and reducing their impact on the planet by implementing corporate sustainability tools. Despite this, the progress of companies in the integration of sustainability, and in particular of human rights and environmental due diligence, in corporate governance processes remain slow and uneven, stopping at the first link of the supply chains.
To address these challenges, the Council on 3 December 2020 invited the Commission to present a proposal for an EU legal framework on sustainable corporate governance, including cross-sector corporate due diligence along global value chains. An invitation that the European Parliament reiterated in March 2021.
The proposal for a Directive on corporate sustainability due diligence presented by the Commission in February 2022 responds to these invitations, also considering that 70% of the companies that participated in two preliminary studies on the duties of directors and on sustainable corporate governance and on the requirements of two diligence in the supply chain (in 2020) and then at the 2021 open public consultation, agreed that a harmonized EU legal framework on due diligence for human rights and environmental impacts is needed.
The proposal will be submitted to the European Parliament and the Council for approval. Once adopted, Member States will have two years to transpose the Directive into national law and communicate the relevant texts to the Commission.