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15 May 2023


Report: Designing an EU due diligence duty that delivers better outcomes

Nick Youngson CC BY-SA 3.0 Alpha Stock Images

'From Policing to Partnership', May 2023

"The European Union is currently negotiating a draft Directive on Corporate Sustainability Due Diligence (CS3D). By mid-2023, the three law-making institutions – the Council of the EU, the Parliament, and the European Commission – are expected to begin negotiations on a final law that will determine the scope and nature of sustainability due diligence requirements for companies operating in the single market.

The draft Directive, as originally proposed by the Commission, aims to ensure that companies active in the single European market contribute to sustainable development and the wider sustainability transition of economies and societies by preventing and addressing negative human rights and environmental impacts. This important and ambitious goal requires a carefully crafted ‘corporate sustainability due diligence’ duty and appropriate administrative supervision and civil liability accountability measures to support it. There is no doubt that the development of this Directive represents a momentous opportunity to ensure that companies conduct meaningful human rights and environmental due diligence throughout their value chains. But the content of the duty matters just as much as its existence. To truly realize the potential of this opportunity to deliver better outcomes for people and planet, the new duty must incentivize the right kinds of approaches by companies that are more likely to deliver better outcomes in practice...

...In the last quarter of 2022, as part of a project funded by the Swedish Ministry of Foreign Affairs, Shift collaborated on a series of interviews with businesses and local stakeholders in four sourcing and production markets – Bangladesh, Kenya, Tanzania, and Thailand. The interviews explored some of the challenges and opportunities companies in those markets currently face in complying with the human rights and environmental expectations of their EU business partners and in preventing and addressing human rights impacts in their own operations..."