The Highly Debated Corporate Sustainability Due Diligence Directive at Risk of a Definitive Block

March 2024
Region: Europe

On February 28, 2024, the Council of the European Union (EU) failed to attain the anticipated qualified majority for endorsing the provisional agreement with the European Parliament concerning the Corporate Sustainability Due Diligence Directive (CSDDD) legislative proposal. The absence of endorsement from the Council of the EU (Council) hinders subsequent endorsement by the relevant committee of the European Parliament – a necessary step before formal adoption of the law by the European Parliament and the Council. As the mandate of the European Parliament is coming to an end, this procedural deadlock might result in the non-adoption of the CSDDD during this legislative term, creating uncertainty regarding the fate of the directive itself.

The CSDDD aims to shift corporate responsibility from a voluntary to a mandatory framework, intending to integrate environment, social and governance (ESG) due diligence obligations for EU companies within its scope and, under certain conditions, outside the EU. A non-adoption of the CSDDD would have consequences on EU and Member States ESG legislative initiatives.

Further detail is provided in the client alert, we are following the next steps closely.