EU ambassadors today gave the green light to the delayed Corporate Sustainability Due Diligence Directive.

The CSDDD requires large EU limited liability companies and non-EU companies active in the bloc to recognise and evaluate environmental damages and breaches of human rights throughout their value chains, and initiate measures to prevent and eradicate them.

It also introduces duties for the directors of the EU companies covered, which includes setting up and overseeing the implementation of the due diligence processes and integrating due diligence into corporate strategy. Directors must also take into account the human rights, climate change and environmental consequences of their decisions.

Amongst the last minute changes made to the directive include the narrowed scope of the companies that fall under it, as the employee threshold was raised from 500 to 1000, and the turnover threshold from €150m to €450m, sparing some 70% of the companies initially anticipated to be in-scope.

Commenting on the outcome, Isabella Ritter, EU policy officer at ShareAction, said: "Today’s vote marks a watershed moment for corporate accountability…Yet the last-minute changes made to appease some member states have substantially reduced the scope of what the CSDDD could have achieved.

“Slashing by more than half the number of affected companies that the legislation will apply to severely undermines its original intentions, failing both people and planet. Additionally, by phasing in the limited measures agreed upon today, we are unlikely to see tangible results for almost a decade, leaving vulnerable workers at risk and jeopardising our planet and its vital ecosystem."

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