EU releases full text of Corporate Sustainability Disclosure law ahead of parliament vote

illuminem summarizes for you the essential news of the day. Read the full piece on Forbes or enjoy below:

🗞️ Driving the news: On March 15, the European Council approved the Corporate Sustainability Due Diligence Directive (CSDDD), which introduces legal obligations for companies to address environmental and human rights issues within their supply chains
• The directive, now pending European Parliament approval, has been significantly diluted from its initial proposal, affecting fewer companies than originally planned

🔭 The context: The CSDDD aims to establish a standard for corporate sustainability due diligence within the EU, focusing on environmental, climate change, and human rights concerns
• This directive holds companies accountable not only for their direct actions but also for those of their subsidiaries and entire supply chain 
• The recent approval followed 45 days of intense negotiations, reflecting a tumultuous journey marked by political pressure and sustainability advocates' anxieties

🌍 Why it matters for the planet: The directive is a critical step towards ensuring corporations operating in the EU are responsible for their environmental impact and human rights practices
• By making companies accountable for their supply chains, the EU aims to reduce negative environmental impacts and improve human rights globally 
• However, the watered-down version means fewer companies will be under its purview, potentially limiting its effectiveness.

⏭️ What's next: The directive now moves to the European Parliament for approval, where it must pass through the legal affairs committee (JURI)
• The final text has been adjusted to include companies with at least 1,000 employees and a €450 million turnover, scaling back its original scope 
• This adjustment, along with a phased implementation plan, indicates a more gradual approach to enforcing due diligence standards

💬 One quote: "This is a historic step towards more sustainable and ethical business practices within the EU and beyond," says Axel Voss, rapporteur for the European Parliament to the CSDDD.

📈 One stat: The revised criteria are estimated to impact about 0.05% of businesses in the EU, significantly reducing the scope from the initial proposal.

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