MEPs Adopt CSDDD
On April 24th, the European Parliament gave its final approval to the Corporate Sustainability Due Diligence Directive (CSDDD). With 374 votes against 235 and 19 abstentions, the new “due diligence” directive, agreed on with the Council, imposes obligations on corporations with regard to their operations as well as their upstream and downstream activities, including supply, production, and distribution, to prevent, end, or mitigate their adverse impact on human rights and the environment.
Despite the watering down in scope and sector, we welcome the adoption of the CSDDD. It represents a huge step forward in setting a new path for businesses operating their supply and value chains.
B Lab Europe launched the Interdependence Coalition in 2021 to advocate for the concept of a duty of care as an essential aspect of corporate governance at a European level. This would have required directors of companies in scope to consider the short-term, medium, and long-term impacts of their decisions on people and the planet. Included in Article 25 of the draft Directive, in February 2023, the Interdependence Coalition presented the member states, the European Parliament and the European Commission with our petition with over 570 supporters to “Save Article 25” in the CSDDD. The article was indeed approved by the European Parliament in mid-2023 but finally fell in the negotiations with member states.
In spite of this result, the Interdependence Coalition opened up a critical, evidence-based debate about the benefit to companies as well as to society and the environment when a company operates with a duty of care. It progressed the corporate governance agenda from compliance with sustainability reporting requirements to how best to drive corporate behavior to consider the wider impacts of business decisions on people and the planet.
The proof of concept provided by the B Corps and other sustainability-focused organizations that contributed to the Interdependence Coalition was invaluable. It gained the attention of the Parliamentarians and the policy drafters and triggered discussions amongst academics, business leaders, and trade associations across and beyond the continent. It looked at a future role for business and argued from a position of evidence.
We thank you for your support, engagement, and all you do to exemplify this behavior. We ask that, collectively, you continue to support the case for an expanded duty of care in your own fields of influence as we seek for businesses to contribute to the solution, not add to the problem of social inequity and environmental degradation.
What’s next?
Now that the European Parliament Election is approaching, we believe businesses can use their voices to engage their audiences, clients, users, consumers, and employees on the importance of acting beyond economic purpose and protecting our democracies. Together with Civocracy, Earth for All, and GOPA.com, we launched a nonpartisan, pro-democratic campaign uniting businesses across Europe to increase awareness and turnout for the 2024 European Parliamentary Elections. You can learn more about and join the 906 campaign here.
We thank you for your continued support during this lengthy legislative journey. As B Lab Europe, we will continue to advocate for businesses’ positive impact, transparency, and accountability.
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B Lab Europe & The Interdependence Coalition team
