EU Council’s Failure: Corporate Sustainability Directive Stalled
EU Council fails to pass the Corporate Sustainability Due Diligence Directive, jeopardizing the Paris Climate Agreement and global community rights, facing widespread criticism.
The EU Council has been unable to pass the Corporate Sustainability Due Diligence Directive a massive blow to the Union’s obligations to the Paris Climate Agreement and the many communities that export to Europe.
In February 2022, the European Commission voted to embrace a proposal for a directive on corporate sustainability and perseverance, which would set compulsory obligations for companies to handle their impact on human rights and the environment. Practically, the framework was established to increase the regulatory capacity of the EU in monitoring corporate activities.
Despite the valuable regulatory infrastructure stated in the CSDDD, large EU member states, like the German and French representatives, torpedoed the directive. A last-minute endeavor by France to “derail negotiations by suggesting a tenfold growth in the company threshold … raised the uncertainty for other states”. The notification, reasonably early in the process, from Germany that it would refrain from voting on the CSDDD, which was “directed by the minority German coalition partner, FDP, met with spiritless opposition by Chancellor Scholz,” made it unlikely that the directive would be assumed.
The effect of many European-based corporations, as well-documented, most often concerns the environment and infringes on the human rights of the countries and communities within ‘the global south’ or historically colonized nations. A significant element of the CSDDD was that the global activities of such parties would be subject to a stringent review. The importance of new regulatory structures to managing corporate malfeasance is essential, not lost on the many civil society organizations within nations most impacted by European business activities.
For example, before the CSDDD vote, over 50 Brazilian civil society organizations demanded the German Chancellor to vote for the directive. With many German businesses buying products, particularly coffee, which is usually associated with horrendous business and labor practices, the possible intro of such a directive may have huge favorable implications for Brazilian society. In the letter sent to Chancellor Scholz, the organizations emphasized that for the “countless victims of corporate abuses around the world,” passage of the CSDDD was a “matter of life or death” and must be enacted. Stressing that “Brazil and Germany are linked by a series of supply chains that are often implicated in human rights violations, including slave labor.”
Several civil society organizations outside Brazil have also vocalized their disappointment in the Council’s neglect to pass the directive. Isabella Ritter, the EU Policy Officer of Share Action, commented, “Those who blocked this legislation have shown indifference to the exploitation of workers and environmental degradation.” Similarly, Uku Lilleväli, Sustainable Policy Officer at WWF European Policy, stated that “EU governments last minute sabotaging and postponement of this new rule book not only disregard the lives, communities, and ecosystems affected by destructive business practices but also deal a blow to the EU’s credibility as a legislator.”
Of course, environmental degradation and the dilemma of low-wage laborers in highly exploitable positions are inherently linked. As is so often stated, these identical communities suffer the most at the hands of deteriorating ecological conditions, unable to relocate, unable to access healthcare, and with no path to legal justice; they often exist on the periphery of attention. They will only persist in abysmal positions with regulatory standards that are strict enough to force supply-chain-wide behavioral change.
The failure of the EU to pass the CSDDD is exemplary of contemporary policymakers’ reluctance not only to commit to the legal obligations of the Paris Climate Agreement but also to the professed values of many of their democratic associations, which place human rights at the center of much of their values. As noted by Lilleväli, moments like this are highly detrimental to the EU’s credibility as an influential regulator; a capacity to act within the parameters of its values increasingly signals to those outside the mainland that these values are rhetorical. The EU must release itself from the yoke of corporate sway and embrace policies that hold human rights commitments as a central belief and its legal responsibility to vital, civilization-saving climate agreements.
