Press Release: Leading EU Sustainable Finance Think Tank welcomes EU negotiators’ compromise on EU Supply Chain Law despite painful concessions
December 14, 2023
After negotiations that ran into the early hours of Thursday morning, a compromise has finally been reached on the Corporate Sustainability Due Diligence Directive (CSDDD) among EU legislators. “This is a truly historic agreement. If adopted, the European Supply Chain Law will ensure that big companies will now have to respect human rights and the environment throughout their value chain”, says Ingmar Juergens, CEO of Climate and Company. He emphasises: “The CSDDD recognises the global impacts of EU’s economic activities and its responsibility in addressing them. This makes it one of the most important laws of this legislative period.”
Until the last minute, there were heavy battles among negotiators on the scope of the CSDDD. The long-awaited compromise, however, misses the opportunity to include value chain due diligence requirements for the financial sector. This exclusion was a last-minute manoeuvre by France in the Council, jettisoning what could have been the biggest sign of political ambition from the EU.
“The CSDDD could have held the financial sector to account to ensure that its actors prevented the financing of our planet’s destruction and human rights violations”, says Louise Simon, EU Policy Advisor and Expert on Corporate Sustainability at Climate & Company.
“It would have laid concrete obligations for financial institutions to take action, to engage with their clients and investees and together define solutions to mitigate sustainability impacts, such as deforestation which is hidden in the supply chain. Therein lies our disappointment.” she adds.
Nevertheless, having an agreement on a Directive with global implications on human rights, environmental and climate issues is a very big step for the EU towards delivering its Green Deal. Climate & Company congratulates the negotiators for the years of hard work on this dossier. The Council of Ministers and the EU Parliament now have the responsibility to bring this crucial piece of legislation over the finishing line. They have to adopt it before the end of this mandate.