Clifford Chance

The European Commission has launched an eight-week consultation on its proposal for mandatory human rights and environmental value chain due diligence for large companies.

On 23 February 2022, the European Commission published its long-awaited proposal for a Directive on corporate sustainability due diligence (CSDD) that would, once adopted, establish far-reaching requirements for large companies operating in the EU. See our previous blog post for more on the content of the proposal and our blog post dedicated to the impact on U.S. companies active in Europe.

The Commission is now seeking feedback from interested parties on the proposed Directive. Feedback received during this consultation may allow the European Commission to capture any mistakes or omissions in its proposed Directive. The feedback received will be summarised by the European Commission and shared with the European Parliament and Council with the aim of feeding into the legislative debate.

The European Parliament and Council have already begun working on the proposal, with a first exchange of views in certain Parliamentary Committees and Council working groups. They will spend the next few months analysing the Commission's proposal and considering what amendments they may wish to make. The proposed Directive will then be adopted in accordance with the ordinary legislative procedure which can take anything from 18 months to two years or longer.

We have prepared a detailed briefing on the draft directive which is available on request by email. We consider

(i) the context to the proposed Directive,
(ii) who will have to comply with the proposed Directive (i.e., not just EU companies),
(iii) the nature of the proposed human rights and environmental due diligence ("HREDD") obligations, and how far they align with international standards on responsible business conduct,
(iv) the climate plan which very large companies would have to adopt,
(v) the proposed directors’ duties regarding sustainability,
(vi) supervision, complaints, civil liability and enforcement under the proposed Directive, and
(vii) alignment with national HREDD laws.

The deadline for submissions to the public consultation on the proposed Directive is 23 May 2022.