Unpacking the CSDDD: due diligence during the EU trilogue
August 31st, 2023

In the heart of Europe, a potentially game-changing legislative milestone is unfolding as the EU trilogue gears up once again for the Corporate Sustainability Due Diligence directive – also known as CSDDD. Imagine this directive as a superhero for responsible business conduct, ready to set powerful standards that would require big European and non-European companies to address the climate and social impacts of their global business activities.  

A whopping 93% of Europeans view climate change seriously and a polling run across 10 EU countries showed that two third of Europeans agree on a law that compels all companies to reduce their greenhouse gas emissions to limit global warming to 1.5 degrees. The CSDDD has the potential to transform the way we conduct business: a crucial step against corporate misconduct that fits into a larger legislative framework aiming to reach EU’s 2050 climate neutrality goal and align with Paris Agreement’s 1.5°C target. This step not only advances the green transition and human rights upholding but can set global corporate conduct benchmarks and while some EU states have national laws, this European coherence is essential. 


Why do we need a strong directive? Real stories that could have ended differently

Picture this: an EU directive that holds companies accountable for any harm they cause to people and the planet. That would mean leaving no one behind. Three years ago, the EU started working on a historic directive to fight against the climate and social crises. Now, the time has come for a strong EU law that is capable of tackling the so-damaging climate crisis and deliver real social justice for all. It’s like an all-seeing eye, ensuring businesses step up and embrace responsible practices. From tackling climate change to safeguarding human rights, the Due Diligence directive could be Europe’s secret weapon for a truly fairer, more sustainable future. Meanwhile, the EU trilogue must reconcile different positions from the European Commission, the EU Council and the European Parliament – the latter holding the most progressive proposal on the table. In other words, this EU trilogue truly is the ‘make or break’ moment for the CSDDD.

The case of environmental damage caused by the Swedish company Boliden in Andalusia is a stark illustration of cross-border environmental repercussions. Boliden’s mining operations in the Aznalcóllar region led to a catastrophic release of toxic waste in 1998, severely  polluting the Guadiamar River and surrounding lands. This incident highlighted the need for robust corporate sustainability measures to prevent such occurrences and underscored the importance of responsible business conduct that transcends national borders. Another concrete example is the case of Ryanair making a complete mockery of EU labour rights highlighting the challenges faced by workers in the aviation industry. By employing tactics that undermine fair employment conditions and sidestep established labour protections, Ryanair has raised concerns about worker exploitation. A robust CSDDD could have tackled Ryanair’s violation by compelling comprehensive assessments of labour practices. 


Is the EU due diligence directive something totally new? Not really 

European map on corporate accountability legislative progress in Europe, ECCJ, 2023

France made history in 2017 when it adopted its corporate duty of vigilance law, which established a duty of vigilance obligation for parent companies and their subsidiaries. It was truly the first legislation of its kind at the time, making France a pioneer of due diligence at the time. Other examples of mandatory human rights and environmental due diligence national acts include the 2023 German Supply Chain Act, which mandates companies to make reasonable efforts to ensure no violations of human and environmental rights and the 2021 proposal on the Dutch Responsible and Sustainable International Business Conduct Act, which targets both the company’s activities and those of its contractors, subcontractors and other legal entities in its value chain. 

Yet, despite their national efforts, France and Germany remain the most conservative EU Member States in the Council, pushing for opposite priorities compared to the Netherlands, which is advocating for a more ambitious directive that can boost its national law.


CSDDD in action – let’s talk justice! 

Robust due diligence shines a spotlight on businesses’ social and environmental impact, pushing corporations to delve deeper, ensuring fair wages, safe conditions, and sustainable practices. Like diligent detectives, companies should scrutinise practices along their value chains for positive change, transparency, and accountability, aiming for a just and sustainable world. We envision a world where robust due diligence becomes the gold standard, paving the way for a more just and sustainable future. 

On the CSDDD, it focuses on company liability. Potential and actual victims of abuses or environmental harm would gain stronger legal grounds for retribution, eliminating corporate escape routes. Consider the Rana Plaza tragedy, where a factory collapse killed 1,134 in seconds. Major global brands evaded accountability, citing supply chain complexities. The CSDDD should put people at the centre, seeking rightful justice for those harmed. 

But hold on: what if Europe doesn’t achieve this directive? 

In the intricate world of politics, the CSDDD stands opposed by conservatives and liberals favouring economic growth. Yet, in this era of corporate dominance, ignoring this regulation fuels the flames of social and climate crises: the dream of climate neutrality wavers. It’s a pivotal choice, where power clashes with purpose, shaping our future’s destiny. 

In the absence of robust due diligence, a harrowing worst-case scenario continues, where social and environmental catastrophes go unchecked, and the well-known disaster of Rana Plaza is only one of the many. But…imagine if there was a Due Diligence law that would oblige and guide corporations to take responsibility for their climate and environmental damages, that would force companies to mitigate and prevent climate risks. A law that would require industries to align with safe practices to protect both people and the planet.


Want to know all about the Corporate Sustainability Due Diligence Directive? Delve into some of its key topics: access to justice and civil liability, the environmental scope, and climate. Stay tuned to dive deeper into its diverse layers, more to come.