In December, the EU Member States, the European Parliament and the European Commission reached a political agreement on the Corporate Sustainability Due Diligence Directive (CSDDD), or the European legislation for international corporate social responsibility (IMVO).
Environmental and human rights
The provisional political agreement is an important milestone in ICSR policy. European regulations contribute to a level playing field for companies and a greater, joint impact in production countries in the field of the environment and human rights. For example, companies are required to identify, eliminate, prevent, limit and account for negative human rights and environmental impacts in their own activities, their subsidiaries and their value chains. In addition, large companies must demonstrate that their business strategy is compatible with limiting global warming to 1.5°C in accordance with the Paris Agreement.
Directors are encouraged to contribute to sustainability and climate change mitigation goals. (Source: Corporate sustainability due diligence – European Commission (europa.eu)
Time-line
This agreement still needs to be formally approved by the Member States and the European Parliament. Expected to be in spring 2024. After voting on the political agreement and publication of the final guideline, the implementation process will start. That is a period of two years during which the directive must be transposed into national law. All stakeholders are closely involved in this process.
The cabinet will share the political agreement with the House in early 2024.
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