🌱 What is the CSDDD?
The CSDDD aims to “ensure that businesses address [the] adverse impacts of their actions, including in their value chains inside and outside Europe”. More specifically, the directive’s aim is “to foster sustainable and responsible corporate behaviour and to anchor human rights and environmental considerations in companies’ operations and corporate governance”.
🌱 What duties does the draft CSDDD place on companies and directors?
Under the CSDDD, both a “corporate due diligence duty” and “duties for the directors” are established. The corporate due diligence duty sets out a requirement of “identifying, bringing to an end, preventing, mitigating and accounting for negative human rights and environmental impacts in the company’s own operations, their subsidiaries and their value chains”. Moreover, specific large companies must plan how to align their business strategy with the objective of limiting global warming to 1.5 °C in line with the Paris Agreement. The duties for the directors set out requirements for “setting up and overseeing the implementation of the due diligence processes and integrating due diligence into the corporate strategy”. Moreover, directors must factor human rights, climate change and environmental consequences into their decision-making, to fulfill their duty to act in the company’s best interest.
🌱 Does the draft CSDDD sufficiently address the technology sector?
On November 29th, 2022, a group of organizations publicly called on EU policymakers to amend the draft CSDDD to make sure the technology sector would be held accountable for their human rights violations. In a joint statement – which currently has over 75 signatories, the organizations said the scope of the companies subject to the draft law, as well as the scope of human rights covered by the draft law, needed to be broadened. They called for the technology sector to be included in the directive’s list of sectors and for all human rights to be covered by the draft law. The organizations also said that the full value chains (esp. the downstream value chains) and that the whole array of business relationships that occur in the technology sector (incl. in the coding phase) needed to be factored into the law for it to be effective. Finally, the organizations also raised the issue of lacking stakeholder engagement (particularly with affected rights- and stakeholders), and of insufficient access to justice and remedy (through administrative penalties and civil liability for harms) under the draft law.
Read more about the CSDDD here:
- https://www.business-humanrights.org/en/latest-news/eu-csddd-tech-2022/