Mediaroom

The European Parliament and Council have started reviewing the Commission’s proposal for a Corporate Sustainability Due Diligence Proposal with the aim to adopt it by the end of 2023 at the latest. The text imposes far-reaching legal responsibilities for companies to avoid adverse impacts on human rights and the environment and adopt business plans that are compatible with a maximum 1.5 degree global warming target. However, the technical complexity of this proposal and the economic headwinds may make its adoption before the next elections in 2024 quite challenging.   

CLEPA welcomes the intention to provide a coherent framework for supply chain due diligence across the EU but warns in the public consultation that the current proposal will create legal uncertainty and may fragment the single market. The directive should be amended to provide more assurances for a harmonised framework, to institutionally anchor the globally prevalent risk-based approach and to recognise limitations in the control that individual businesses have over their supply chain. Furthermore, Member States should be obligated to provide businesses with concrete support in identifying supply chain risks, and the role of industry initiatives to allow business to cooperate on supply chain due diligence should be strengthened.   

The European Commission clarified that it will publish a separate but connected proposal for market restrictions for goods made from forced labour in September. The proposal intends to answer calls from members of the European Parliament to include an import ban on forced labour products in the Corporate Sustainability Due Diligence Proposal. CLEPA has earlier stated in its proposal that market surveillance should be updated to ensure that imported finished goods fulfill similar due diligence requirements. Trade measures in the form of an import ban should, however, be avoided.