We Advocate for Directors’ Duty of Care Across the EU

We advocated for the Directors’ Duty of Care

In February 2023, we launched a petition to keep Article 25 in the CSDDD draft, which included the duty for directors of large businesses to take into account the interests of those affected by the company’s decisions as part of a broader, integrated commitment to long and short term sustainability strategies.

Our response to the EU proposal for a Directive on Corporate Sustainability Due Diligence

On May 23, 2022, B Lab Europe and the Interdependence Coalition submitted a formal response to the EU commission on their proposed directive for Corporate Sustainable Due Diligence. It was our chance to make the powerful case for incorporating the concept of stakeholder governance for all companies into the proposed legislation, in line with the tenet of the Interdependence Coalition.

There’s a better way to do business. Our mission is to make sure that directors of every single company in the European Union, whether big or small, are mandated to consider in their decision making process the interests of all of the company’s stakeholders – including wider society and the environment – and not only shareholders. We believe this could be achieved through the introduction of a Pan-European legal requirement.

Every company registered in the European Union must take ownership of its social and environmental impact in its governance.

Influencing policy across the region is a long-term ambition requiring time, evidence, and strength in numbers. With the creation of the Interdependence Coalition, we aim to:

• Build a strong case for directors to have a broad duty of care for the impact of business; highlight on people and planet stakeholder governance and management through research and case studies from companies that are leading the way
• Demystify the concept of stakeholder governance and management and equip more businesses with resources to engage their directors
• Build a coalition of leaders across business, academia, law, policy making, and environmental practice to speak with one voice on the changes we seek in response to the European Commission’s Corporate Sustainability Due Diligence Directive (CSDDD) proposal on Sustainable Stakeholder Governance.

To date, our starting point is the Consultation on Sustainable Corporate Governance. Learn more about how the CSDD Directive is consultation fits into the European regulatory context here.

Unpacking Stakeholder Governance

While the concept of stakeholder governance and management has been gaining a lot of traction, there are still many myths and misconceptions about what it means in practice to run your business in the interest of people and the planet.

For starters, we can define stakeholders as all those who either contribute to, and/or are affected by the business and therefore have a “stake” in it.

There is a better way to do business. We are each dependent upon another and thus responsible for each other and future generations.