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Rule of law | 9 September 2021

Close the loop: Addressing businesses' adverse environmental impacts
Rule of law
European Green Deal

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Close the loop: Addressing businesses' adverse environmental impacts

There has been growing pressure from various stakeholders asking the EU to establish mandatory due diligence rules for companies that are based in the EU or that provide goods or services in the EU. This pressure comes not only from civil society organisations, but also from businesses themselves.

As the largest trading bloc in the world, the EU has a responsibility to address the massive environmental impact of companies operating in Europe.

To do this, a holistic approach at the EU level is needed to shape business conduct and ensure companies do not undermine the bloc’s sustainability ambitions. And business will benefit from clarity on this – if companies are compelled to tackle their climate footprint, for example, this will also help them remain resilient in the transition to net zero.

In a few months, the bloc will be unveiling a new legislative proposal on corporate due diligence, dealing with all of the responsibilities and processes for identifying, preventing, and mitigating adverse impacts within a business’s ‘value chain’.

ClientEarth lawyers say the new law must address adverse environmental impacts if it is to contribute effectively to the EU Green Deal and make the EU a global leader on the environment.

In a new briefing, lawyers recommend that the legislation must notably:

  • Cover all companies;
  • Cover entire value chains; and,
  • Ensure transparency and reporting.