The proposal goes beyond what the German Due Diligence Act already established for companies

While some EU member states, among them Germany, have already passed corporate sustainability due diligence laws, the European Commission is now following suit with a proposal for the European Union.

The draft, which was published on February 23, proposes several due diligence measures for companies, which are supposed to improve human rights and environmental protection along supply chains.

The Commission’s proposal intends a two-step implementation. In the first step, the rules will be applied to all companies employing more than 500 employees with a net turnover of over 150 million euros. Two years later, in the second step, those rules will be expanded to companies with more than 250 employees and a net turnover of over 40 million euros.

The proposed directive intends to achieve better regard for international human rights, for example safe working conditions, and international environmental protection treaties.

Affected Firms need to implement necessary steps in this regard and can, in case of violation, be forced to pay fines. In addition, companies with more than 500 employees must ensure that their business strategy is in accordance with the internationally agreed 1,5-degree goal. Additionally, victims will be granted the possibility to take legal action for damages that could have been avoided with appropriate due diligence measures.

MSPs make an important contribution to strengthening human rights along supply chains and protecting the environment. For the example, the MSP ‘Partnership for Sustainable Orange Juice’ (PANAO) aims to improve working conditions, wages, and the protection of the environment in the Brazilian production of orange juice.

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