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Last-minute deals and a series of failed votes threatened to block the EU’s Corporate Sustainability Due Diligence Directive (CSDDD – also known as the CS3D), but a weakened version squeaked through the EU Council last month. There was no such drama when the EU Parliament made it official this week – passing the directive 374 to 235.
Although weakened, it is one of the most far-reaching sustainability laws in the world. When implemented, thousands of EU and non-EU companies must identify, assess, and mitigate environmental and human rights violations – ranging from child labor and slavery to pollution, deforestation, and damage to ecosystems – in their upstream supply chain and some downstream activities such as distribution and recycling.
While labor issues have dominated the coverage of this law, it also requires companies to adopt climate transition plans aligned to 1.5°C (the goal adopted in the Paris Climate Accord). It also has teeth! Each EU country will create supervisory authorities to investigate and impose penalties on non-complying firms.
The CS3D’s complex journey is not quite over. The EU still has a bureaucratic grip over it for two more rounds of voting ending on May 23rd. However, member states are expected to rubber-stamp the directive without discussion (this time for real), and member states will have two years to transpose it into national law.
Sustainability advocates see this as a huge win. Richard Gardiner of the World Benchmarking Alliance said, “Today ends a process that included nine parliamentary committees, over 3,000 amendments and closes five years of debate and negotiations between MEPs.”
MEP Lara Wolters said, “Today’s vote is a milestone for responsible business conduct and a considerable step towards ending the exploitation of people and the planet… This law is a hard-fought compromise and the result of many years of tough negotiations.”
But it’s not all rainbows and unicorns in the EU. In recent years, they have issued a torrent of new environmental regulations, and many expect the pushback – especially among rural voters – to swing the June elections to the right. After a winter of farmer protests, some anticipate that the upcoming elections could even “kill’ the EU Green Deal. Belgian Green MEP Philippe Lamberts says, “The likelihood of [the far right and right] killing the green deal is very high” and that Greens have “to play their best game ever” to avoid the “absolute bullshit” of allowing right-wing politicians to win the information war against green policies.
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