E3G welcomes the Commission’s proposal for the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) as an important step to incorporate sustainability considerations in corporate due diligence practices and directors’ accountability to stakeholders. Although the proposed Directive sets the direction for large EU companies’ approaches to due diligence, it can be strengthened to ensure a positive impact on society and the environment. E3G proposes several amendments to the proposal in this consultation response.
E3G believes that improvements to the following aspects of the proposal should be considered:
- The scope of the Directive needs to be broader to align with other corporate legislation at the EU level (like the CSRD) and to ensure companies in high-risk sectors are adequately covered.
- Provisions for companies’ transition planning need to be strengthened to better address climate-related obligations and accountability linked to director duties and overall due diligence.
- Corporate variable remuneration policies need to be explicitly linked to the company’s long-term sustainability goals and transition planning to ensure corporate accountability for adverse impact.
- Human rights due diligence requirements should be strengthened to consider a broader range of adverse impacts for vulnerable communities, including climate adverse impacts, across the whole supply chain.