Corporate sustainability and Due Diligence Directive: the good, the bad, and the ugly

The good: the EU Council finally reached an agreement on the Due Diligence Directive. The directive is a fundamental piece of legislation to tackle forced labour worldwide and ensure EU companies promote social rights and good working conditions worldwide, and will work in tandem with the regulation banning products made with forced labour.

The bad, however, is the scope: the net turnover for a company to be covered was agreed, in December, over €150 million. In February, it was doubled to €300 million. The agreement today dials it up again, to €450million. With the new threshold, only some 5400 companies will be affected: 0.05% of the total.

The ugly: this means the directive is weakened, and millions of workers who would have been protected under the December compromise are left behind now. For countries like Germany, the Directive will cover less companies than their current domestic legislation.

Despite the drawbacks, the directive remains a powerful tool, having a European standard on corporate due diligence means having fair competition based on a common set of rules and from the Workers’ Group we urge member states to swiftly transpose and implement it in letter and spirit. We will continue working with our national organisations to ensure this is the case.