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.
A new legal briefing by Frank Bold unpacks the new restrictions on information requests to business suppliers following the Omnibus 1 revisions to the CSRD and CSDDD, and explains the practical implications for companies.
Due diligence under the Corporate Sustainability Due Diligence Directive (CSDDD) is designed to direct finite corporate resources towards the issues that matter most for people and the environment. At the heart of that effort is prioritisation, defined in Article 9 of the Directive. Having spoken about this topic at the RBA conference this week, I want to share some reflections on what good prioritisation looks like in practice and what pitfalls to avoid.
The Parliament proposal shows that many of the concerns raised through Frank Bold’s research and engagement with policymakers are now entering the legislative mainstream. But the negotiations ahead will determine whether the final framework is capable of addressing the structural weaknesses that continue to undermine trust in the sustainable investment market.
