EU Council Proposes Weaker Corporate Sustainability Directive
European Union member states have moved to relax the proposed Corporate Sustainability Due Diligence Directive, which aims to hold companies accountable for environmental and human rights violations in their supply chains. The Council’s latest position raises the employee and revenue thresholds that would determine which companies must comply with the directive, potentially exempting most businesses from its requirements. This follows criticism from green groups and European lawmakers who previously deemed the initial proposal inadequate, reports 24brussels.
The Council adopted a French proposal that requires only companies with over 5,000 employees and a minimum €1.5 billion in net turnover to actively monitor their supply chains for abuses. This contrasts sharply with the current proposal, which applies to companies having 1,000 employees and €450 million in turnover.
If the new thresholds are ratified by the EU, it is estimated that under 1,000 European companies would fall under the purview of this law, significantly reducing its intended impact.
Additionally, the Council has agreed that companies should only assess their direct suppliers rather than their entire supply chains, reversing the original stipulation. There is also a proposal to delay the deadline for EU countries to incorporate the directive into national law by one year.
Denmark, set to assume the presidency of the Council of the EU in July, will oversee negotiations between the Council, the European Parliament, and the Commission regarding the directive.
This development comes shortly after the European Commission announced its decision to abandon anti-greenwashing legislation just days before pivotal negotiations with Parliament and the Council, sparking significant backlash from various factions within the legislative body.
