AIM urges EU member states to support Corporate Sustainability Due Diligence Directive compromise agreement

In the coming weeks, EU lawmakers are set to pass historic legislation setting a common EU framework for responsible business conduct – the EU Corporate Sustainability Due Diligence Directive (CSDDD). While views on the precise shape of the legal requirements diverged and continue to diverge – within and across stakeholder groups – from the onset, it was clear that most stakeholders, including businesses, agreed on the need for an EU level playing field that sets common standards for responsible business conduct in global value chains while calling for caution about imposing far-reaching obligations in a time of global uncertainty and complexity.

The compromise agreement reached by EU institutions in December 2023 reflects a high level of alignment with existing internationally recognised human rights and environment due diligence standards, which AIM is committed to promoting through our AIM-Progress responsible sourcing initiative. The compromise agreement rightly requires companies to take a risk-based approach to their due diligence, allowing them to prioritise their actions and focus on actions that will have the greatest impact.

The Directive falls however short of providing a set of fully harmonised due diligence rules at EU level. We call therefore on EU member states to harness the opportunity which the further transposition process offers to ensure as much EU-wide harmonisation as possible of their national due diligence rules. This is essential to avoid diverging national rules which would inevitably lead to fragmentation of the EU internal market.

“Industry needs legal certainty and clarity, and it is important that we deflect the risk of internal market fragmentation, resulting from uncoordinated national transposition of the EU due diligence rules” observed Michelle Gibbons, Director-General of AIM