Corporate sustainability due diligence: How to integrate human rights and environmental concerns in value chains? [EU Legislation in Progress]

Written by Stefano Spinaci (3rd edition, updated on 17.10.2023).

Companies can play a key role in building a sustainable economy and society. At the same time, their global value chains can pose risks to human rights and the environment. A growing number of EU companies have taken initiatives to deploy due diligence processes, often using existing voluntary international standards on responsible business conduct. Some Member States have meanwhile started developing their own legal frameworks on corporate due diligence.

In a legislative-initiative resolution adopted in 2020, Parliament called on the Commission to introduce mandatory due diligence legislation to avoid fragmentation and to give businesses and citizens legal certainty. In February 2022, the Commission proposed a directive laying down rules on corporate due diligence obligations, directors’ duties, civil liability and protection of persons reporting breaches.

The legislative file is subject to the ordinary legislative procedure. The Council reached political agreement on a general approach in December 2022. In Parliament, eight committees submitted opinions to the Committee on Legal Affairs (responsible for the dossier), which adopted its report on the Commission proposal in April 2023. Parliament voted on the report during its June 2023 plenary session. The co‑legislators then entered into interinstitutional negotiations on the final text.

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Versions

• October 2023: Corporate sustainability due diligence: Could value chains integrate human rights and environmental concerns? (3rd edition)