EU's Regulation on Corporate Due Diligence and Human Rights Due Diligence for Corporations involved in Union's supply chains
The European Parliament is gearing up for a heated debate over the EU Supply Chain Act, also known as the Corporate Sustainability Due Diligence Directive (CSDDD), as part of the Omnibus I legislative package. This package, aimed at reducing bureaucracy, could potentially reshape corporate sustainability practices across the European Union.
In the parallel universe of backroom politics, opinions are divided regarding the CSDDD. The intent of this directive is to heighten sustainability and accountability in corporate practices by making companies identify and address human rights and environmental risks within their value chains.
A Texas-sized Tussle
The main bone of contention in the forthcoming Omnibus deliberations revolves around simplifying sustainability reports under the Corporate Sustainability Reporting Directive (CSRD) and altering the EU Taxonomy. However, the stances on EU supply chain rules are remarkably disparate, ranging from leaving them intact to advocating for their outright abolition. This is suggested by off-the-record remarks from various political factions.
As Angelika Niebler, a CSU MEP, puts it, "The CSDDD is certainly a hot potato in the negotiations."
Shortly after the EU Commission's proposals were revealed, representatives of the Social Democrats and the Greens declared their opposition to any dilution of the CSDDD. Green MEP Anna Cavazzini justified her support for a delay in the CSDDD's application, stating it would provide the EU Parliament with time "not to gut the EU Supply Chain Act." Meanwhile, Social Democrat Evelyn Regner, in reference to the Supply Chain Act, declared that what the EU Commission perceives as bureaucracy reduction is, in reality, "a shirking of responsibility."
The Left vs. The Uncertain Right
While the left-centrist fractions are working to preserve the CSDDD, other parties are questioning its very essence. It remains unclear whether the Conservatives, the EU Parliament's largest faction, will push for a complete elimination of the CSDDD. However, there is dissent within the faction, with CSU's Niebler publicly endorsing the corresponding proposal championed by German Chancellor Friedrich Merz during his visit to Brussels. Yet, there are other voices within the faction.
The outcome of this debate will play a crucial role in determining the future of the CSDDD and the overall impact of the Omnibus I package. The target is to vote on the Omnibus package during the EU Parliament's October session to establish a joint position for the final negotiations with the Council. If the Polish presidency's mediation efforts in June fail to produce a general orientation, there will be increased pressure on the Danes, who will assume the EU Council presidency in July, to expedite the negotiations. This is because the entry into force of CSRD (second and third waves) and CSDDD has been delayed only by a year. If an agreement isn't reached by then, all laws will revert to their original status, or the EU Parliament will need to vote again on a stop-the-clock measure.
- The heated debate in the European Parliament over the EU Supply Chain Act, also known as the Corporate Sustainability Due Diligence Directive (CSDDD), has extended to various aspects of business, finance, and politics, as the directive aims to reshape corporate sustainability practices and remodel the EU Taxonomy.
- In the general-news realm, the positions on the EU supply chain rules, included in the Omnibus I legislative package, are polarizing, with some factions advocating for their preservation while others are uncertain or push for their abolition, potentially affecting the future of corporate sustainability and accountability in the European Union.
