Press release: 23 February 2022
New EU corporate sustainability rules: A patchy starting point with need for improvement
The European Commission today unveiled its Corporate Sustainability Due Diligence legislation, which contains key requirements for businesses to ensure they do not contribute to environmental harms or adverse human rights impacts.
Clotilde Henriot, ClientEarth Trade and Environment Lead, said: “This law could be a game-changer in reducing companies’ impact on the environment, but the approach for defining environmental impacts and the limited number of companies covered risk undermining its effectiveness.
“The current proposal fails to capture the full range of environmental impacts that a company can cause to the planet, with a limited list of international norms and the glaring absence of the Paris Agreement.
“That said, the proposal rightly expands the list of environmental impacts companies must consider when carrying out human rights checks. It is critical the Parliament and Council make an overt connection between these two impacts, otherwise there is a risk of creating further loopholes that will allow companies to ignore critical environmental harms where the link to a human rights abuse is less obvious.
“We’re pleased that the commission rose to the challenge of extending the rules to cover the entire length of the value chain. But by limiting the law’s application to only 1% of EU firms, the door has been left wide open for the vast majority of the European market to continue business as usual – notably for companies with riskier supply chains.”
Henriot added: “The express duty for companies to adopt plans to align their corporate strategies and objectives with the 1.5°C temperature goal of the Paris Agreement could be a much-needed driver of corporate climate action.
“This provision provides a starting point, but falls short of addressing companies’ responsibility in the climate crisis. Climate impacts should form an integral part of companies’ due diligence along the other adverse environmental impacts. That is the only way to achieve the objective of climate neutrality the Commission committed to under the European Green Deal.”
ClientEarth is a non-profit organisation that uses the law to create systemic change that protects the Earth for – and with – its inhabitants. We are tackling climate change, protecting nature and stopping pollution, with partners and citizens around the globe. We hold industry and governments to account, and defend everyone’s right to a healthy world. From our offices in Europe, Asia and the USA we shape, implement and enforce the law, to build a future for our planet in which people and nature can thrive together.