On 11 April, more than 20 leading businesses and networks released a joint statement calling for alignment of the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) with the international standards of the UN Guiding Principles and the OECD Guidelines for Multinational Enterprises. The group comes from a range of countries and sectors and includes Unilever, Mars, Tony’s Chocolonely, Ingka Group | IKEA, Crédit Mutuel, Aviva Investors, Ericsson, Hapag-Lloyd, Novo Nordisk, the Global Network Initiative (GNI) and others.

Both the proposal published by the European Commission in February 2022 and the position adopted by the European Council in December 2022 depart from the international standards in various ways. Ahead of key votes in the European Parliament (EP)’s Committee on Legal Affairs and the EP plenary, signatories to the statement urge MEPs to adopt a text that is more closely aligned with the UNGPs and OECD Guidelines.

The statement outlines five key points:

  1. The due diligence requirements should be risk-based and apply to the entire spectrum of risks and impacts across the full value chains of companies, including downstream, in all sectors, including financial institutions, in line with the international standards.
  2. Multistakeholder collaboration can provide a platform to learn from others’ experiences. However, initiatives can only support, but never replace, a company’s own due diligence responsibilities. They therefore cannot provide any ‘safe harbour’.
  3. The core content of the due diligence duty should incentivise companies and their directors to look at the company’s own activities (e.g. their purchasing practices or business model) that can heighten or reduce risks to people, the environment and climate across value chains. It should also encourage engagement by companies with business partners, rather than top-down policing through an overreliance on contracts and audits.
  4. The distinguishing feature of sustainability due diligence is that it depends for its effectiveness and credibility on the perspectives of affected stakeholders, incl. workers, unions, communities and human rights & environmental defenders. This needs to be reflected clearly in the Directive.
  5. The Directive will not be effective without meaningful enforcement to ensure that companies that are subject to it carry out due diligence to a high quality and that those who are harmed have access to remedy. This includes both administrative supervision and civil liability.

Many other businesses and industry associations have already expressed support for effective mandatory due diligence legislation.