European trade groups propose amendments to CS3D
January 24, 2023
Several major European trade bodies have joined forces to urge the European Parliament and Council to amend the due diligence framework.
Twenty-seven European trade organisations have proposed recommendations to enhance the benefits of the corporate sustainability due diligence proposal (CS3D).
CS3D aims to promote sustainable and responsible corporate behaviour across value chains and establish corporate due diligence duty.
The framework will introduce a common set of binding legal requirements on human rights and environmental protection.
However, the group of trade groups have presented recommendations and concerns which should be considered in the following steps of the legislative process.
The joint business statement said: “The European business community supports an EU due diligence framework. However, it calls for realism, proportionality, and workability for this framework to truly enable and guide businesses in taking necessary steps towards more sustainable supply chains.”
This has been signed by groups such as EuroCommerce, BusinessEurope, EuroChambres and ECODA.
These have urged the European Parliament and Council to prioritise full harmonisation as the most important element of the proposal.
Full harmonisation would avoid fragmentation of the EU single market and ensure a level playing field, according to the joint business statement.
The business groups also argued that the current framework’s focus on all aspects within the whole value chain is “neither manageable nor realistic.”
As a result, companies should be able to prioritise the most salient risks because otherwise they cannot implement due diligence requirements efficiently.
Companies should also be provided freedom to take appropriate actions to cease, prevent, or mitigate identified adverse impacts in accordance with a risk-based approach.
These groups have also claimed that regulating directors’ duties will have negative side-effects, such as interfering with national company law systems and creating legal uncertainty.
The letter stated: “Regulating directors’ duties is unnecessary to reach the objectives of the proposal and does not belong in a due diligence framework.”
Last Updated: 24 January 2023