INSIGHT by ClientEarth
Yesterday the European Parliament’s legal affairs committee (JURI) adopted its position on the Corporate Sustainability Due Diligence Directive proposal – a critical new law intended to spur environmental and climate action in the EU’s corporate sector.
The law will require companies to identify and assess environmental harms and human rights violations across their value chains – and to take action to prevent and eliminate them.
ClientEarth lawyers welcomed the committee’s amendments overall, which – while not perfect – are aimed at better aligning with international standards. Notable improvements include the extension of company scope, inclusion of the financial sector, value chain coverage, variable remuneration of directors and recognition of the rights of Indigenous Peoples and local communities.
However, the JURI committee’s position adopted a weaker outcome on tackling environmental impacts than recently adopted by the Committee on Environment, Public Health and Food Safety (ENVI). Lawyers warn watering down these provisions risks undermining the achievement of the ambition set out in the EU’s Green Deal.
Amandine Van Den Berghe, ClientEarth lawyer, said: “The legal affairs committee’s position papers over some of the cracks in the Commission’s original proposal, notably by including the Paris Agreement.
“But it fails to provide a comprehensive definition of what constitutes an adverse environmental impact, opening loopholes that could allow companies to turn a blind eye to significant environmental issues in their value chains, including their emissions.
“Another backwards step is scrapping the Convention on Biological Diversity from the list of international treaties companies must refer to, which seems at odds with the EU’s targets to halt and reverse the loss of biodiversity.
“It’s now down to the European Parliament to preserve improved aspects and address remaining flaws in its full vote in May. Most importantly it will need to push for a definition that fully captures the corporate world’s environmental footprint in negotiations with the Commission and Council. Without this clarity, the EU risks rubber stamping a paper tiger.”
The JURI committee is leading on the European Parliament’s positions on the file. The Parliament will vote on its final negotiating position on the Corporate Sustainability Due Diligence Directive in May, before the trilogue stages with the Commission and EU Council take place later in the year.
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