April 24, 2023 | less than a minute read

A blow to the CS3D? Compromise reached with a downside

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Mark Temme

Global Business Development Manager

Get in touch

Mark Temme

Global Business Development Manager

On the evening of 18 April, Members of the European Parliament (MEPs) reached an internal agreement on the Corporate Sustainability Due Diligence Directive proposed by the Commission in February 2022 to hold large companies accountable for human rights abuses and environmental violations in their value chain.

The bright side of the medal: more companies are in the scope, including asset managers and institutional investors, risk-based due diligence, and wartime due diligence. The other side of the medal is, that downstream use of products and services are out of scope and member states can’t introduce more severe due diligence rules.

A vote is expected next week. And future will tell if that is more greenwashing than really providing improvement within the supply chain.

#CSDDD #CS3D #supplychain #duediligence #EUparliament

According to Richard Gardiner, EU public policy lead at the World Benchmarking Alliance, this could lead to a “race to the bottom” instead of driving up sustainability performance. “While we welcome the progress being made by MEPs to reach a deal, the overall purpose of the increased company due diligence must be to ensure a ‘race to the top’ approach,” he said. “Capping the measures companies are expected to take, via maximum harmonisation, [risks] introducing a “race to the bottom,” he added.