Law introduces mandatory due diligence on human rights, environmental criteria, and the directors’ duty of care
The European Parliament has adopted a corporate sustainability due diligence (CSDD) directive that seeks to introduce mandatory due diligence on human rights, environmental criteria, and the directors’ duty of care. (Photo: AFP via Getty Images)
Six Catholic civil society organizations have welcomed the European Parliament’s adoption of the corporate sustainability due diligence (CSDD) directive that seeks to introduce mandatory due diligence on human rights, environmental criteria, and the directors’ duty of care.
Caritas Europe, CIDSE — an umbrella organization of Catholic development agencies in Europe and North America, COMECE — the Commission of Bishops’ Conference of the European Union, Justice and Peace Europe and Laudato Si Movement, a global Catholic climate action group, issued a joint statement on June 2 to hail the move.
For years, the European Parliament Legal Affairs Committee sought to introduce the corporate sustainability due diligence directive. On May 23, it was adopted with 19 votes in favor, 3 against, and 3 abstentions, according to the EU Parliament website.
The new rules aim to integrate human rights and environmental impacts into companies’ governance.
The regulations make it mandatory for firms to be obliged to identify, and where necessary prevent, end, or mitigate the negative impact of their activities, including that of their business partners, on human rights and the environment. This includes child labor, slavery, labor exploitation, pollution, environmental degradation, and biodiversity loss.
Catholic groups said the move is expected to have far-reaching impacts.
“We are particularly pleased to see that important principles have been affirmed with this text: the extension of the duty of care of company directors to include human rights, climate change, and environmental consequences possibly making them liable for the outcomes resulting from their decisions on sustainability matters; and a first significant step towards ensuring access to justice for the many victims of the greed that too often characterizes business practices, especially in the Global South,” the statement said.
The groups’ referred to a message from Pope Francis where he called for the end of “selfish profit” that violates social justice.
“I think of the difficulties which, in various countries, today afflict the world of work and business; I think of how many, and not just young people, are unemployed, many times due to a purely economic conception of society, which seeks selfish profit, beyond the parameters of social justice,” Francis said in the message on World Labor Day in 2013.
The Catholic organizations said they view “the duty of care of company directors” as a key constituent of “a culture of care” that they advocate for and that needs to be extended to the whole of the value chain.
“Businesses need to maintain a moral compass and their company directors need to uphold the highest standards while leading by example,” the groups said.
The groups said they appreciate that this text gives a strong sign that the European Institutions are ready to steer away from “an economic model based solely on the pursuit of profit to the detriment of the whole of Creation.”
Catholic bodies have called on the companies to reverse the burden of proof for victims of corporate abuse, putting the onus on corporations.
“We call on all parties to uphold human dignity, integral human development, holistic peace and apply an integral ecological approach that can enable all living beings and the environment to thrive within planetary boundaries,” the statement said.
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