BEERG Newsletter - Due Diligence: Deal by Year End?

Negotiations continue on the proposed Corporate Social Due Diligence Directive (CSDDD) in Brussels between the Council of Ministers, the European Parliament, and the European Commission, with hopes that a deal can be concluded before the end of this year. 

The European Parliament wants the Directive to cover not just supply chains, the nexus of companies that supply the ultimate corporate user, but also value chains, the use that is made of goods and services after they are sold. A significant number of Member States are unhappy with this as they see it as “overreach” and further complicating what is already a complicated piece of legislation. 

Also at issue, is whether the finance sector should be included in the Directive. France, for instance, is particularly opposed to this.

The European trade unions see the CSDDD as potentially giving them leverage to push union organising and collective bargaining throughout global supply chains. For example, it is possible that the unions could use the CSDDD to go after European, and US companies located in Europe, over alleged anti-union practices in the US. Think VW and Chattanooga. European Works Councils will demand to be informed and consulted about due diligence procedures. 

All the more reason why CHROs and global LR executives need to take an interest in this legislation and begin to prepare for it now. It is not something that can be left to CSR specialists or purchasing executive.