By Antje Gerstein, Member of the EESC Employers' Group

On 23 February, the European Commission launched its proposal for a Directive on Corporate Sustainability Due Diligence, which sets out an obligatory framework for companies to identify and act on adverse environmental and human rights impacts across their own organisation – and their entire value chain.

Unfortunately, the proposal as it stands does not deliver on the aspired goals. It is important to note that the Commission's own Regulatory Scrutiny Board (RSB) pointed to serious flaws in the impact assessment, for example the description of the problem is vague and the report should be better aligned with other initiatives.

The co-legislators should aim to move away from provisions that simply impose obligations and rather choose a more process-oriented approach based on engagement and on building trust. This means that businesses should be expected to design their human rights due diligence processes in a way that is risk-based and proportionate to their potential and actual impacts.

As companies need legal certainty and have to minimise liability risks, they might feel forced to shorten supply chains and withdraw from regions with potentially problematic human rights situations. This could have serious implications, as global trade would be damaged and many workers in developing and emerging countries would lose their jobs.

The RSB opinion and the EESC opinion on "Sustainable corporate governance" (INT/973), both emphasise the need for regulatory and policy coherence. The UN Guiding Principles for Business and Human Rights (UNGPs) and the OECD Guidelines are the benchmarks that clearly outline the duties and responsibilities of all actors and we need to stick to these.

The European Parliament and the Council of the EU have to choose: do they want to create a constructive, partnership-based, future-proof, outcome-oriented and real-world approach to sustainable global supply chains? Do they want to ensure that parallel product-related initiatives are better aligned? If so, then there is still a lot to do. We can assure the co-legislators that employers are committed to doing their part to ensure a successful outcome. This Directive touches upon the core business of our members. We have no choice but to get it right.

Read the full text in the Employers' Group Newsletter: https://europa.eu/!vYX7Wq