In light of the severity and the short timeframe that remains to take action to limit global warming to 1.5 degrees, it is important that the EU Corporate Sustainability Due Diligence Directive (CSDDD) leaves no legal ambiguity concerning corporate obligations regarding climate change.
In light of the severity and the short timeframe that remains to take action to limit global warming to 1.5 degrees, it is important that the EU Corporate Sustainability Due Diligence Directive (CSDDD) leaves no legal ambiguity concerning corporate obligations regarding climate change. The aim of this paper is to provide recommendations on Article 15 "Combating climate change" of the Commission’s proposal which lacks precision regarding the targets and content of the transition plans it refers to. The Corporate Sustainability Reporting Directive (CSRD) already provides a baseline for coherence. CSDDD should not fall behind that baseline, in order for both legislations to support the effectiveness of one another.
These recommendations on Article 15 need to be accompanied by changes to Article 3 of the proposed CSDDD, that would ensure a comprehensive approach to the definition of environmental adverse impacts. The definition should not only capture the effect that companies have on all three - the environment, climate and human rights - but also how these are interdependent and what damage prevention entails.
At the end February, we exposed how the European Commission’s recently announced Omnibus proposals intend to modify corporate sustainability due diligence, reporting and taxonomy and how it will influence the effectiveness of these key legal frameworks.
After three months of rushed decision-making, the European Commission presented its Omnibus Simplification Package and proposed major rollbacks to the EU’s corporate sustainability legislation, threatening to undermine Europe's leadership in sustainable business practices and ESG reporting.
With the latest leaks, it is becoming clearer and clearer that President Ursula von der Leyen and Commissioner Valdis Dombrovskis are willing to sacrifice the very foundations of the EU’s ESG legislation all whilst bypassing the due legislative process.
