Corporate Sustainability Due Diligence Directive

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EU Adopts Corporate Sustainability Due Diligence Directive

Posted on July 8, 2024

Posted in Environmental Regulation, Environmental, Social, and Governance, European Environmental and Public Law

The CSDDD is set to impose mandatory human rights and environmental due diligence obligations for in-scope companies.

By Paul A. Davies, Michael D. Green, and James Bee

On 5 July 2024, the Corporate Sustainability Due Diligence Directive (CSDDD) was published in the Official Journal of the EU, marking a significant milestone in the growing regulatory environment in relation to companies being required to embed responsible business conduct into due diligence processes and policies.

Initially proposed in February 2022…

EU Reaches Provisional Agreement on Forced Labour Regulation

Posted on March 25, 2024

Posted in Environmental, Social, and Governance, European Environmental and Public Law

The proposed regulation would ban forced labour-made products from the EU market, affecting companies’ supply chains and requiring compliance checks.

By Paul A. Davies, Michael D. Green, and James Bee

On 5 March 2024, the European Parliament and European Council announced that they had reached a provisional political agreement on the regulation (Regulation) that aims to prohibit any product manufactured using forced labour from being placed on or exported from the EU market.

The European Commission proposed the…

Corporate Due Diligence Rules Agreed by European Council and European Parliament

Posted on December 15, 2023

Posted in European Environmental and Public Law

The new rules would oblige companies to integrate their human rights and environmental impact into their management systems.

By Paul A. Davies, Michael D. Green, and James Bee

On December 14, 2023, the European Council (Council) and European Parliament (Parliament) reached provisional agreement on the Corporate Sustainability Due Diligence Directive (CSDDD). The agreement follows an extensive negotiation processes, which began in June 2023, after the European Commission had initially proposed the CSDDD in February 2022.

The CSDDD’s key aim is to enhance the protection of the environment and human rights globally. The CSDDD as proposed will set obligations for companies regarding the actual and potential adverse impacts of their own operations, those of their subsidiaries, and those carried out by business partners, described as the “business chain of activities.” The CSDDD would also establish a requirement for large EU companies to adopt a plan to ensure that their business model and strategy are compatible with the Paris Agreement, i.e., including concrete targets and measures in line with limiting global warming to 1.5 °C.

The proposed CSDDD would establish rules on penalties and civil liability for infringements (although these will ultimately be set by Member States).

OECD Updates Corporate Due Diligence Guidelines

Posted on June 27, 2023

Posted in Environmental, Social, and Governance, European Environmental and Public Law

The Guidelines build on current social, environmental, and technological issues facing businesses following the last update in 2011.

By Paul A. Davies, Michael D. Green, and James Bee

The Organisation for Economic Co-operation and Development (OECD) released updated Guidelines for Responsible Business Conduct on 8 June 2023 (the OECD Guidelines).

Background to the OECD Guidelines

The OECD Guidelines, introduced in 1976, set out voluntary principles and standards to ensure multinational companies embed due diligence practices, to enhance sustainable development and address adverse social and environmental impacts. Currently, 51 countries adhere to the OECD Guidelines, including the majority of EU Member States.

ESG Insights: 10 Things That Should Be Top of Mind in 2023

Posted on January 5, 2023

Posted in Environmental, Social, and Governance

Navigating a global patchwork of ESG regulation and enforcement while preparing for greenwashing claims and other ESG litigation will likely be among the main concerns for companies in 2023.

By Paul Davies, Sarah Fortt, and Betty M. Huber

Both anticipated and less expected changes occurred across the ESG landscape in 2022. Anticipated changes included regulatory developments across the globe, including in the US, the UK, and the EU. Less expected changes included global and regional political shifts, such as the fallout from the Russian invasion of Ukraine, the continued evolution of governmental policies following the COVID-19 pandemic (such as responses to labor market challenges and reshoring efforts), and growing political tensions throughout the world.

In 2023, investors, customers, regulators, and other key stakeholders are expected to continue to demand corporate responsiveness on ESG issues. However, how these stakeholders expect organizations to respond to ESG issues is becoming increasingly more nuanced and complex. In this complicated macroeconomic, political, and legal context, this fourth annual installment of Latham’s ESG Top 10 List highlights the ESG developments and trends that are likely to emerge in 2023.

European Parliament Adopts Position on Deforestation Regulation

Posted on September 28, 2022

Posted in Air Quality and Climate Change, Environmental Regulation, Environmental, Social, and Governance

The adopted position would mean that financial institutions fall under the remit of the regulation, requiring them to conduct additional due diligence on both established and new customers.

By JP Sweny, Michael Green, James Bee, and Vanessa McLellan

On 13 September 2022, the European Parliament voted to adopt its position in relation to the European Commission’s proposed regulation on deforestation-free products. The European Parliament’s position would widen the scope of commodities and products covered by the regulation, and subject financial institutions to additional due diligence requirements to ensure that their activities do not contribute to deforestation.

European Commission Proposes Legislation to Prohibit Products Made or Imported With Forced Labour

Posted on September 15, 2022

Posted in Environmental, Social, and Governance

The proposal highlights the growing global focus on companies’ human rights obligations not just towards employees but also towards workers in their supply chains.

By Paul A. Davies, Michael D. Green, and James Bee

On 14 September 2022, the European Commission (the Commission) introduced a proposed Regulation (the Proposal) which seeks to ban products made using forced labour from being produced in or imported into the EU. The Proposal is the latest example of the increasing amount of legislative requirements being developed in relation to ESG considerations in companies’ supply chains, particularly concerning human rights issues.

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