Many different stakeholder groups have provided commentaries in response to the draft EU Corporate Sustainability Directive, published in February. Here we compile some of the contributions and will expand this post over the coming months to provide a holistic overview of commentary on the emerging mHRDD landscape – both at the European level and in the individual EU member states.

Germany adopted the Supply Chain Act (‘Lieferkettensorgfaltspflichtengesetz’) last year; and France has had the Devoir de Vigilance legislation in place for a few years. Spain has also launched a legislative initiative aiming at enhanced accountability for businesses. More countries will inevitably start the process of legislative development in the coming months and years.

The majority of the commentators, regardless of their positioning on the interest group map, acknowledge the ‘milestone character’ of the Proposal Directive. But while commentary from law firms essentially focuses on the substantive elements of the law and point businesses affected towards necessary steps to be taken in terms of compliance, NGOs and other civil society actors concentrate on what they characterise as weaknesses in the proposed legislation. The main points identified include:

• the scope of coverage (including the restriction of the coverage to larger companies)
• the (limited) definition of ‘high risk sectors’
• limitations on the scope of due diligence measures
• the nature of director duties
• the absence of provisions mandating stakeholder engagement in the proposed Directive

In this context, the European Coalition for Corporate Justice (ECCJ) also points out the alleged failure of the Commission to include provisions on the facilitation of access to justice for victims of human rights violations by companies.

An important academic contribution, which is certainly worth consulting by anyone seriously interested in the development of this proposal, was made by Robert McCorquodale and Stuart Neely on the question of directors’ duties. The authors were closely involved in studies for the Commission in the run up to the proposal and pick up on the link between directors’ duties and human rights due diligence in a European legislative context concluding that directors’ duties can serve as an effective leverage in Member States’ individual jurisdictions to compensate for the lack of an appropriate corporate governance element in the Directive.

Both Shift and The Danish Institute of Human Rights published their comprehensive analyses of the proposed Directive in March 2022 including recommendations on how to strengthen certain parts of it. Both are worth consulting as a first step. A similarly comprehensive piece interpreting and evaluating the Directive’s content has been published on Verfassungsblog, a German law blog on constitutional matters.

The Business and Human Rights Resource Center also provides a chronological list of written inputs on the new Proposal Directive which can be found here.

Even this short survey of commentaries shows how much debate has been created and how great is the need for clarification on certain key areas. A list of resources on the proposed Directive is below. The list is non-exhaustive and will be continuously updated.

Selected commentary on the proposed Corporate Sustainability Directive

Law firms

European Commission takes huge step towards mandating corporate sustainability due diligence – Lexology

Global supply chains creating global duties for global corporations: Commission’s draft of the Corporate Sustainability Due Diligence Directive, Christoph H. Seibt, Boris Kasolowsky, Marlen Vesper-Gräske, Iris Hammerschmid, Marius Scherb (freshfields.com)

Upcoming mandatory Human Rights and Environmental Due Diligence in Eu – Hogan Lovells Engage

European Commission issues major proposal on due diligence obligations to protect human rights and the environment across supply chains | White & Case LLP (whitecase.com)

European Commission’s proposed directive on corporate sustainability due diligence | Gleiss Lutz

Corporate sustainability due diligence directive: the European Commission’s proposal, Shailen Patel, Charmaine Lee (macfarlanes.com)

Human Rights and the Environment — EU publishes draft Corporate Sustainability Due Diligence Directive | Perspectives & Events | Mayer Brown

EU Proposal for a Directive on Corporate Sustainability Due Diligence: potential impact on businesses in Asia, Gilly Hutchinson, Sarah Martin (linklaters.com)

Looming EU human rights and environmental due diligence directive will have global impact | Herbert Smith Freehills | Global law firm

First, do no harm: EU proposes new rules on Corporate Sustainability Due Diligence – Productwise (cooley.com)

European Commission (Finally) Proposes Mandatory Human Rights and Environmental Due Diligence Directive – A Deep Dive Q&A on the Commission Proposal | Ropes & Gray LLP (ropesgray.com)

European Commission proposes a Directive on Corporate Sustainability Due Diligence (cliffordchance.com)

European Commission Issues a Proposal for a Directive on Corporate Sustainability Due Diligence | International Trade Law (cmtradelaw.com)

The EU Commissions proposal for a directive on corporate sustainability due diligence – Allen & Overy (allenovery.com)

Corporate Sustainability Due Diligence: A long-awaited proposal revealed | Travers Smith

Advisory organisations

Some initial thoughts on the proposed EU Due Diligence Directive – Ergon Associates

Shift’s Analysis of the EU Commission’s Proposal for a Corporate Sustainability Due Diligence Directive – Shift (shiftproject.org)

EC Proposal for a Directive on Corporate Sustainability Due Diligence | Kumi Consulting | Building Responsible Supply Chains

Don’t delay, new EU due diligence legislation is underway – twentyfifty

Civil Society

EU Corporate Sustainability Due Diligence Directive: a global milestone that will need further clarity – Accountancy Europe

The EU proposal for mandatory due diligence: Initial review by Anti-Slavery International – Business & Human Rights Resource Centre (business-humanrights.org)

EU Parliament clarifies obligations for companies sustainability reporting but leaves all SMEs out of the mandatory framework – Alliance for Corporate Transparency

Dangerous gaps undermine EU Commission’s new legislation on sustainable supply chains – European Coalition for Corporate Justice

European Parliament improves EU sustainability reporting content but fails on scope – WWF

European Commission Publishes Proposal for a Corporate Sustainability Due Diligence Law | Global Policy Watch

Legislating for impact – analysis of the proposed EU corporate sustainability due diligence directive.pdf (humanrights.dk)

Academic / International organisations / Other

Due Diligence Around the World – Verfassungsblog

Enforcing Due Diligence Obligations – Verfassungsblog

Corporate Purpose and the EU Corporate Sustainability Due Diligence Proposal | Oxford Law Faculty

EU Publishes Draft Corporate Sustainability Due Diligence Directive (harvard.edu)

The new European Directive on Corporate Sustainability Due Diligence (biicl.org)

Full article: Directors duties and human rights impacts: a comparative approach (tandfonline.com)

ILO-OHCHR-OECD response to the EU Commission Proposal – 07 March 2022

Corporate Purpose and the Misleading Shareholder vs Stakeholder Dichotomy by Beate Sjåfjell, Jukka Mähönen :: SSRN

EU Commission presents strategy for sustainable textiles to tackle fashion’s environmental impact & labour abuses – Business & Human Rights Resource Centre (business-humanrights.org)