EU Releases Due Diligence Proposal

‍In February 2022 the European Commission published its proposal on Corporate Sustainability Due Diligence.

The initiative which introduces mandatory due diligence for both environmental and human rights impacts, aims to foster sustainable and responsible corporate behaviour throughout global value chains. 

This directive will impact the following organisations:

• Companies established in the EU with more than 500 employees and more than EUR 150m turnover in the last financial year. For the textiles sector, it will cover
  companies with more than 250 employees and a net turnover of more than EUR 40m in the last financial year. 

• Companies in third countries (non-EU) with more than EUR 150m turnover in the EU in the year preceding the last financial year. For the textiles sector, this threshold applies if it generated more than EUR 40m but not more than EUR 150m in the EU in the year preceding the last financial year. 

This proposal applies to the company's own operations, their subsidiaries, and their value chains (direct and indirect established business relationships). To comply with the corporate due diligence duty, companies need to:

• integrate due diligence into policies;
• identify actual or potential adverse human rights and environmental impacts;
• prevent or mitigate potential impacts;
• bring to an end or minimise actual impacts;
• establish and maintain a complaints procedure;
• monitor the effectiveness of the due diligence policy and measures;
• and publicly communicate on due diligence.

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Věra Jourová, Vice-President for Values and Transparency, said:

‍“This proposal aims to achieve two goals. First, to address consumers' concerns who do not want to buy products that are made with the involvement of forced labour or that destroy the environment, for instance. Second, to support business by providing legal certainty about their obligations in the Single Market. This law will project European values on the value chains, and will do so in a fair and proportionate way.”

Thierry Breton, Commissioner for the Internal Market, said:

‍”While some European companies are already leaders in sustainable corporate practices, many still face challenges in understanding and improving their environmental footprint and human rights track record. Complex global value chains make it particularly difficult for companies to get reliable information on their suppliers' operations. The fragmentation of national rules further slows down progress in the take up of good practices. Our proposal will make sure that big market players take a leading role in mitigating the risks across their value chains while supporting small companies in adapting to changes.”

The proposal will now be presented to the European Parliament and the Council for approval.

Once adopted, Member States will have two years to transpose the Directive into national law and communicate the relevant texts to the Commission.

You can find a summary and more information here: https://ec.europa.eu/commission/presscorner/detail/en/ip_22_1145

And the full directive here: https://ec.europa.eu/info/sites/default/files/1_1_183885_prop_dir_susta_en.pdf

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Contact us on responsibility@europeaoutdoorgroup.com for more information

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