European Business Law Review
Volume 35, Issue 5 (2024) pp. 603 – 626

https://doi.org/10.54648/eulr2024034

Abstract

The implementation of mandatory corporate due diligence has been a growing trend in recent years. Viewed as having the potential to prevent corporate abuse, mandatory due diligence can be presented as the mechanism to substantially improve responsible corporate behaviour in practice. In 2022, the European Commission proposed a Corporate Sustainability Due Diligence Directive (CSDDD). The proposal presents obligations for companies regarding any actual or potential adverse human rights and environmental impacts, as well as liability for violation of such obligations. It aims to streamline due diligence obligations across Member States and create a level playing field. Since then, the Council of the EU and the European Parliament have agreed their negotiating positions. This paper explores the proposed CSDDD, including amendments, and analyses the challenges and prospects for mandatory due diligence. It explores whether the CSDDD could result in a genuine transformation of corporate practices to prevent corporate harms, or whether developments are similar to the incremental changes already seen over the years. It is argued that while the CSDDD could be another step in the right direction, significantly more needs to be done to prioritise rights holders above corporations and demonstrate a real change in responsible business practices.

Extract

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