On 10 March 2021, a draft directive on Corporate Due Diligence and Corporate Accountability was adopted by the EU Parliament. EU Parliament Draft Directive on Corporate Due Diligence and Corporate Accountability . As the risk and impact of business human rights and other ESG failings become ever more apparent, the EU's plan for a mandatory supply chain due diligence regime gains pace. It covers three categories of issues (Art. The Parliament's Resolution, adopted on 10 March 2021, sets out principles for proposed new legislation on corporate due diligence and accountability for human rights, environmental and governance impacts within businesses' operations and through value chains. CORPORATE JUSTICE, Commissioner Reynders announces EU corporate due diligence legislation, Brussels, 30 April 2020, available here. In order to achieve this . This paper takes into consideration the EU draft Directive on Corporate Due Diligence and Corporate Accountability and examines ways to better design and integrate environmental due diligence. Legal Alerts / 16 Mar 2021 European Parliament Adopts Legislative Initiative on Corporate Due Diligence and Corporate Accountability. The European Parliament adopted a resolution of 10 March 2021 calling on the Commission to propose EU-wide legislation on corporate due diligence and corporate accountability (the European Initiative). Vote on draft report on corporate due diligence and ...A first step towards EU-wide legislation on mandatory ...The European Parliament Committee on Legal Affairs ...Commentary: The European Parliament's Draft Directive on ... The European Parliament's legislative train schedule monitors the progress of legislative files identified in the 10 priorities of the European Commission What does the draft Directive require? 6 The Draft Directive outlines a mandatory corporate due diligence obligation on businesses to identify, prevent, manage, remedy, and . EU Parliament Draft Directive on Corporate Due Diligence and Corporate Accountability . The European Parliament adopted 504 votes to 79, with 112 abstentions, a resolution with recommendations to the Commission on corporate due diligence and corporate accountability. The proposal establishes a mandatory . The Commission's proposal for a sustainable corporate governance directive has been pushed back to October 27. . This now has the potential to become EU law, following which it would need to be implemented by Member States within two years. Voluntary, non-enforceable due diligence standards have existed for quite a while, without bringing about the desired effect so it seems. Draft EU Due Diligence Directive . 2021 with recommendations to the Commission on corporate due diligence and corporate accountability (2020/2129(INL)). In its considerations, it is stated that: Next steps for the draft Directive. JURI adopted the report on January 27, 2021, albeit with revisions to the annex which forms the basis for the Directive now approved by Parliament. The follow up by the Commission to the European Parliament Report by MEP Lara Wolters (NL, S&D) on corporate due diligence and corporate accountability (adopted in March 2021) has been so far non transparent and it is currently not possible to know what its impact on the legal proposal will be. 2020/2129 (INL) - 10/03/2021. Where are we at the End of 2020? The list includes some new regulatory obligations, some new rights that have been recognized, some themes from . Today he serves as an expert to the Ministry… A Look at the Top 10 (Plus 1) Business and Human Rights Issues Expected for 2022. According to the Committee, the Directive should include the following main elements: Article 2.3 of the Recommendations for drawing up a directive of the European Parliament and of the Council on corporate due diligence and corporate accountability ('This Directive shall also apply to large undertakings, to publicly listed small and medium-sized undertakings and to small and medium-sized undertakings operating in high-risk sectors, which are governed by the law of a third . A new EU mandate places liability on companies unable to assess and mitigate unethical third-party behaviour. More recently, in September 2020 the European Parliament's Committee on Legal Affairs published a report together with a proposal for the adoption of a Directive on corporate due diligence and corporate accountability. Adjunct Professor Department of Law University of Gothenburg Göteborg, Sweden Rolf Skog was for five years (1985-1990) secretary to the Committee on Stock Ownership and Efficiency, Ministry of Industry, Sweden, and for ten years (1991-2001) secretary to the Company Law Committee, Ministry of Justice, Sweden. The current draft of the EU Directive on Corporate Due Diligence and Corporate Accountability specifically states that new clauses should be included in contracts to support the implementation of companies' human rights due diligence strategies. Background. On March 10, 2021, the EU Parliament 5 adopted the Draft Directive on Corporate Due Diligence and Corporate Accountability (the "Draft Directive"), setting out recommendations to the European Commission. This post is also available in: Español. The EU executive will ensure coherence between new corporate due diligence legislation and the revised non-financial reporting directive to increase companies' accountability, . The European Parliament passed a resolution approving a proposed text of a Corporate Due Diligence and Accountability Directive ("Proposed Directive") in March 2021.. The EP's draft directive would require in-scope companies to: Establish due diligence processes to identify, assess, prevent, monitor, and remedy potential and/or actual adverse impacts on human rights, on the environment, and on good governance in its operations and business relationships. Directive on Corporate Due Diligence and Corporate Accountability (draft CDDCA Directive), imposing a mandatory cross-sectoral (i.e. The draft Directive applies to all business enterprises incorporated, domiciled, or established in the EU, as well as non-EU enterprises doing . The corporate due diligence and corporate accountability initiative (ESG Due Diligence law) is a key pillar of this ambitious approach and could have wide-ranging implications for companies across all sectors operating in the internal market. The draft law . Following its initial May announcement that human rights and environmental due diligence will become compulsory for companies at EU level, the world's largest trading block is now full steam ahead when it comes to developing legislation in this area. The European Commission published a study on the subject in February 2020, announced that it expected to propose a directive on the subject in due course in April 2020 and covered the subject in its study of sustainable corporate governance in July 2020. The report included an annex in the form of a proposed draft directive. Missing from the COP26 agenda: corporate accountability. No. A white paper on how compliance programs should react to the EU's draft directive on mandatory corporate due diligence and accountability. Corporate due diligence and corporate accountability: What we know so far. As mentioned above, on 11 September 2020, the CLA published a report that included the draft directive on corporate due diligence and corporate accountability. The official title proposed is a Directive on Corporate Due Diligence and Corporate Accountability). The proposed EU due diligence and disclosure rules will do just that. The proposed regime will have potentially far-reaching implications for businesses and their value chains. The New legislation presented by EU Parliament requires companies operating in the EU to . with a draft Directive that takes a . Parliament also proposes insertions in both Brussels Ia and Rome II. Deal. 3): human rights, environmental risks, and governance risks. Corporate due diligence and corporate accountability, ending an era of voluntary policing. The proposal, which will be voted on in January and tabled to the plenary of the European Parliament, may serve as a blue print for the legislation to be . The 2013 Rana Plaza building collapse in Bangladesh caused the death of 1,134 garment workers and injured about 2,500 people. As things stand, the draft directive, which was adopted (with significant amendments to the . Ahead of the SDG Summit 2021 on 11-14 October, CSR Europe publishes the report of the meeting with the European Parliament's Responsible Business Conduct working group on how to effectively shape an EU integrated approach on due diligence. Directive on Corporate Due Diligence and Corporate Accountability (hereinafter: òDraft Directive) adopted by the European Parliament on March 10. th, 2021. No. [16] Week of 21 September 2020 The European Parliament Committee on Legal Affairs proposes text for the corporate due diligence and corporate accountability directive that EU Member States would transpose into national law. The draft includes recommendations to the European Commission for a Directive on corporate due diligence and corporate accountability for the sake of "harmonization, legal certainty and the securing of level playing field". . Call for Reflection on Sustainable Corporate Governance; ECLE Commentary: The European Parliament's Draft Directive on Corporate Due Diligence and Corporate Accountability; Please click on the 'Resources' tab on this page for more links to relevant comment from ECGI scholars and others. The concept of mandatory supply chain due diligence has been under consideration at the EU level in 2020. The drive for mandatory corporate human rights due diligence accelerated in late 2020. Human rights due diligence 1. corporate governance in the context of the European Green . On 10 March 2021, the European Parliament adopted a legislative initiative report (504 votes in favour, 79 against and 112 abstentions) setting out recommendations to the European Commission (EC) on corporate due diligence and accountability, including a draft directive.The report proposes the introduction of a mandatory corporate due diligence obligation to identify, prevent . Cocoa & chocolate manufacturers reaffirm support for EU mandatory due diligence & call for adoption of a proposal without further delay Date: 31 May 2021 In brief. The German Parliament adopted a draft law on corporate due diligence in supply chains in June 2021, which aims to increase transparency and obligate larger companies to take responsibility with their supply chains. 2. and examines how some key aspects raised in the design of an (environmental) corporate due diligence obligation are addressed in the draft. Although colloquially it has been referred to as an EU mandatory human rights due diligence initiative, the draft - called "Directive of the European Parliament and of the Council on Corporate Due Diligence and Corporate Accountability" - is far broader and appears to be inspired by the 2017 French corporate duty of vigilance law . The report recognises the 'severe' limitations of voluntary due diligence standards and states that the Union should urgently adopt measures setting out . The European Commission published a study on the subject in February 2020, announced that it expected to propose a directive on the subject in due course in April 2020 and covered the subject in its study of sustainable corporate governance in July 2020. On 10 March 2021, the European Parliament adopted a legislative initiative report setting out recommendations to the European Commission on corporate due diligence and accountability, including a draft directive. On 11 March 2021, members of the Dutch parliament submitted a legislative initiative that includes more or less similar due diligence requirements. Business & Human Rights Update: EU Supply Chain Directive proposals. The Directive applies to all U.S. companies conducting business in the EU. Although colloquially it has been referred to as an EU mandatory human rights due diligence initiative, the draft - called "Directive of the European Parliament and of the Council on Corporate Due Diligence and Corporate Accountability" - is far broader and appears to be inspired by the 2017 French corporate duty of vigilance law . Update to the EU Corporate Due Diligence and Corporate Accountability Initiative: The Provisional Draft and the 10 Questions Businesses Still Need to Know . As things stand, the draft directive, which was adopted (with significant amendments to the . . Companies must no longer cause harm to people and planet with impunity. Button. Due Diligence and Corporate Accountability"—is far broader, and it appears to be inspired by the 2017 French corporate duty of vigilance law. Pressure grows for EU law on global corporate accountability. Although colloquially it has been referred to as an EU mandatory human rights due diligence initiative, the directive—called the "Directive of the European Parliament and of the Council on Corporate Due Diligence and Corporate Accountability"—is far broader, and it appears to be inspired by the 2017 French corporate duty of vigilance law. It is expected that the European Commission will publish a legislative proposal this month, which will be subject to debate by both the EU Parliament and Council. This now has the potential to become EU law, following which it would . This newsletter briefly summarises the key features of this far-reaching draft directive (available here). The draft report includes a comprehensive proposal of a directive which would require businesses to conduct human rights and environmental due diligence in their operations and value chains. . Vote on draft report on corporate due diligence and corporate accountability - Letter from Markus J. Beyrer to the European Parliament Legal Affairs Committee Share this LinkedIn Resolution. The new law on corporate due diligence and corporate accountability will set the standard for responsible business conduct in Europe and beyond, are you ready? Business bears much of the responsibility for . . The second part addresses some specific themes concerning corporate accountability and remedy under the regime. On March 10, 2021, the EU Parliament 5 adopted the Draft Directive on Corporate Due Diligence and Corporate Accountability (the "Draft Directive"), setting out recommendations to the European . Companies today are struggling to get to grips with ESG obligations in value chains; the draft EU directive reduces doubts as to what is expected. The proposed EU Directive on Corporate Due Diligence and Corporate Accountability is a step in the right direction, but its strengths need to be emphasised and there are some issues that have to be resolved, in the view of this article's author. CRI ® Group Corporate Due Diligence and Corporate Accountability solution helps your business operating in the EU to comply with all EU mandates. However, the draft directive is a good indication of the current trend of discussions in Europe and, given its massive support in European Parliament resolution of 10 March 2021 with recommendations to the Commission on corporate due diligence and corporate accountability ( 2020/2129 (INL)) The European Parliament, - having regard to Article 225 of the Treaty on the Functioning of the European Union, - having regard to the Charter of Fundamental . In September 2020 , the European Parliament on Legal Affairs issued a draft report setting out recommendations to the Commission on corporate due diligence and corporate accountability. On 10 March 2021, the European Parliament adopted a legislative initiative that calls for the Commission to prepare a directive proposal on mandatory supply chain due diligence. In February 2021 the European Parliament's Legal Committee adopted a "Draft Directive on Corporate Due Diligence and Corporate Accountability" (Draft Directive) calling on the European Union to legally require companies to respect human rights and the environment in their supply chains. EU prepares a European corporate diligence and accountability standard. The European Parliament's Committee on Legal Affairs issued in September 2020 a draft report for adoption by the Parliament. . The first part of this note is focussed on issues connected with the translation of human rights due diligence (as laid down in the UNGPs) into a binding legal standard. Scope This alert memorandum provides an overview of the requirements proposed under the draft CSRD against the backdrop of the current NFRD regime, and situates them within other key EU sustainability rules (the Taxonomy Regulation, the Sustainable Finance Disclosure Regulation ("SFDR"), and the upcoming Corporate Due Diligence and Accountability . Directive on corporate due diligence and corporate accountability for the sake of ^harmonization, legal certainty and the securing of level playing field _.16 What do we already know about the content of the proposed Directive?