EU Approves Corporate Sustainability Law with Watered-Down Changes

On March 15, the European Council approved the Corporate Sustainability Due Diligence Directive, creating legal liability for companies related to environmental and human rights violations in their supply chain. The final directive will now go to the Parliament for approval. The new due diligence requirements apply not only to the direct actions of the company, but also to their subsidiaries and supply chain. Significant changes were made to the initial proposal, impacting the scope and timeline for implementation. With these changes, an estimated 30% of the originally impacted companies will be affected, translating to about 0.5% of the total number of businesses operating in the EU. The Corporate Sustainability Due Diligence Directive will now undergo further scrutiny in the European Parliament, specifically within the legal affairs committee.