As the discussions around the proposed EU Directive on Corporate Sustainability Due Diligence continue, ESBG, together with 26 other business associations, addressed policy makers with a number of recommendations and concerns.

The statement focused on key messages that large parts of the international business sector identified as essential to creating a feasible and coherent set of rules. The associations highlighted that carrying out the required due diligence checks across the entire value chain is neither manageable nor realistic, and recommended implementing a truly risk-based approach instead.
The obligation to exercise due diligence must be proportionate to the size and means of the company in question. Furthermore, the parties stressed that the list of conventions in the Annex to the Directive is too extensive and generates legal uncertainty, considering that these norms are only applicable to states and not to private legal entities.
The statement also made clear that directors should not be held liable for the company’s compliance with the rules and that legal liability provisions need to be balanced. Regarding the overall design of the Directive, the associations called for an option to organise the due diligence measures at group level and warned of the risks that a fragmented European legal landscape would bring.
In general, the business actors asked for clear guidance ahead of the new rules’ entry into force, and reiterated that more emphasis should be put on multi-stakeholder initiatives. The European Parliament is expected to vote on its position in May 2023, before negotiations with the Council and the Commission on the final text will start.