What changed

PA_Legam

PA_Legrej

AMENDMENTS

SHORT JUSTIFICATION

The Committee on International Trade submits the following to the Committee on Legal Affairs, as the committee responsible:

The EU has for long been a global forerunner in sustainability and corporate due diligence and has committed to upwards convergence in both environmental and social sustainability both within the Union and globally. In the area of sustainability reporting and corporate due diligence, this has been exemplified by the Directives 2006/43/EC, 2013/34/EU, (EU) 2022/2464 and (EU) 2024/1760 which established a robust platform for corporate sustainability reporting and due diligence. The combination of these Directives ensured, amongst other things, the availability of sustainability related data and risks vital for both investors and NGOs assessing abuses, mechanisms for companies to improve the due diligence processes and sustainability of their entire value chains as well as increased access to justice for those suffering from harms throughout the value chain.

Amendment 1

The current Commission proposal risks watering down the core elements of this newly established sustainability reporting and due diligence framework. Although the aim of simplification in terms of reporting duties for companies is laudable and steps related to, inter alia, electronic reporting or the increased use of guidelines are welcome, simplification cannot mean broad sweeping deregulation that changes the entire purposes of the previous directives. Dismantling core parts of the legislation risks not only creating regulatory uncertainty for companies, barring proper access to justice for those harmed, but also hampers the availability of quality, comparable and granular sustainability data that is much called for by investors and business partners alike. While the protection of especially SMEs from an overburdening of reporting requirements is a pertinent worry, there needs to be a more simple and efficient way of reaching this goal than dismantling the core parts of the existing sustainability reporting and due diligence framework.

Proposal for a directive

******

Article 4 – paragraph 1 – point 4 – point -a (new)

The Committee on Employment and Social Affairs calls on the Committee on Legal Affairs, as the committee responsible, to propose rejection of the Commission proposal.

Directive (EU) 2024/1760

Article 8 – paragraph 2 – introductory part

Text proposed by the Commission

Amendment

(-a) in paragraph 2, the introductory part is replaced by the following:

‘2. As part of the obligation set out in paragraph 1, following a risk-based approach that takes into account relevant risk factors, companies shall take appropriate measures to:’

Amendment 2

Proposal for a directive

Article 4 – paragraph 1 – point 4 – point -a a (new)

Directive (EU) 2024/1760

Article 8 – paragraph 2 – point a

Text proposed by the Commission

Amendment

(-aa) in paragraph 2, point (a) is replaced by the following:

‘(a) carry out a scoping, based on reasonably available information, to identify general areas across their own operations, those of their subsidiaries and, where related to their chains of activities, those of their business partners, where adverse impacts are most likely to occur and to be most severe;’

Amendment 3

Proposal for a directive

Article 4 – paragraph 1 – point 4 – point a

Directive (EU) 2024/1760

Article 8 – paragraph 2 – point b

Text proposed by the Commission

Amendment

(b) based on the results of the mapping as referred to in point (a), carry out and in-depth assessment of their own operations, those of their subsidiaries and, where related to their chains of activities, those of their direct business partners, in the areas where adverse impacts were identified to be most likely to occur and most severe.;

(b) based on the results of the scoping as referred to in point (a), and where, on the basis of relevant, factual and reliable information, the company has grounds to believe that adverse impacts have arisen or may arise, carry out an in-depth assessment of the relevant business partners or the area in their chains of activities where adverse impacts were identified to be most likely to occur and most severe. Companies shall be able to prioritise assessing direct business partners, in line with severity and likelihood of the adverse impacts.

Amendment 4

Proposal for a directive

Article 4 – paragraph 1 – point 4 – point a a (new)

Directive (EU) 2024/1760

Article 8 – paragraph 2 – subparagraph 1 a (new)

Text proposed by the Commission

Amendment

(aa) in paragraph 2, the following subparagraph is added:

‘Where the assessment confirms the likelihood or existence of the adverse impact, that impact shall be deemed to have been identified.’

Amendment 5

Proposal for a directive

Article 4 – paragraph 1 – point 4 – point b

Directive (EU) 2024/1760

Article 8 – paragraph 2a

Text proposed by the Commission

Amendment

(b) the following paragraph 2a is inserted:

deleted

‘2a. Where a company has plausible information that suggests that adverse impacts at the level of the operations of an indirect business partner have arisen or may arise, it shall carry out an in-depth assessment. The company shall always carry out such an assessment where the indirect, rather than direct, nature of the relationship with the business partner is the result of an artificial arrangement that does not reflect economic reality but points to a circumvention of paragraph 2, point (b). Where the assessment confirms the likelihood or existence of the adverse impact, it is deemed to have been identified.

The first subparagraph is without prejudice to the company considering available information about indirect business partners and whether those business partners can follow the rules and principles set out in the company’s code of conduct when selecting a direct business partner.

Notwithstanding the first subparagraph, irrespective of whether plausible information is available about indirect business partners, a company shall seek contractual assurances from a direct business partner that that business partner will ensure compliance with the company’s code of conduct by establishing corresponding contractual assurances from its business partners. Article 10(2), points (b) and (e) shall apply accordingly.’;

Amendment 6

Proposal for a directive

Article 4 – paragraph 1 – point 4 – point b a (new)

Directive (EU) 2024/1760

Article 8 – paragraph 2a a (new)

Text proposed by the Commission

Amendment

(ba) the following paragraph is inserted:

‘2aa. Relevant, factual and reliable information shall include:

(a) submissions of information made pursuant to Article 14;

(b) information made available by any authority relevant for the implementation of this Directive, such as Member States’ due diligence, labour, or health authorities;

(c) any issues arising from meaningful consultations with relevant stakeholders, such as business representatives, civil society organisations and trade unions, or pursuant to Article 13;

(d) reports, studies and impact assessments by relevant entities, including industry and multi-stakeholder initiatives.’

Amendment 7

Proposal for a directive

Article 4 – paragraph 1 – point 4 – point c

Directive (EU) 2024/1760

Article 8 – paragraph 4

Text proposed by the Commission

Amendment

4. Where information necessary for the in-depth assessment provided for in paragraph 2, point (b), and in paragraph 2a can be obtained from different business partners, the company shall prioritise requesting such information, where reasonable, directly from the business partner or partners where the adverse impacts are most likely to occur.;

4. For the purposes of the in-depth assessment in accordance with paragraph 2, point (b), where existing and external data sources are not sufficient and additional necessary information can be obtained from different business partners, the company shall prioritise requesting such information directly from the business partner or partners where the adverse impacts are most likely to occur.;

Amendment 8

Proposal for a directive

Article 4 – paragraph 1 – point 5

Directive (EU) 2024/1760

Article 10 – paragraph 6 – subparagraph 1 – point c

Text proposed by the Commission

Amendment

(c) use or increase its leverage through the suspension of the business relationship with respect to the activities concerned.

(c) use or increase its leverage, where possible, through the temporary suspension of the business relationship with respect to the activities concerned.

Amendment 9

Proposal for a directive

Article 4 – paragraph 1 – point 5

Directive (EU) 2024/1760

Article 10 – paragraph 6 – subparagraph 3

Text proposed by the Commission

Amendment

Prior to suspending a business relationship, the company shall assess whether the adverse impacts from doing so can be reasonably expected to be manifestly more severe than the adverse impact that could not be prevented or adequately mitigated. Should that be the case, the company shall not be required to suspend the business relationship and shall be in a position to report to the competent supervisory authority about the duly justified reasons for such decision.

Prior to temporarily suspending a business relationship, the company shall assess in consultation with relevant stakeholders, whether no available alternative to that business relationship, that provides a raw material, product or service essential to the company’s production of goods or provision of services, exists and the suspension would cause substantial prejudice to the company or whether the adverse impacts from doing so can be reasonably expected to be manifestly more severe than the adverse impact that could not be prevented or adequately mitigated. Should that be the case, the company shall not be required to suspend the business relationship and shall refer to the competent supervisory authority to receive guidance on the course of action to take.

Amendment 10

Proposal for a directive

Article 4 – paragraph 1 – point 5

Directive (EU) 2024/1760

Article 10 – paragraph 6 – subparagraph 4

Text proposed by the Commission

Amendment

Member States shall provide for an option to suspend the business relationship in contracts governed by their laws in accordance with the first subparagraph, except for contracts where the parties are obliged by law to enter into them.

Member States shall provide for an option to suspend or terminate the business relationship in contracts governed by their laws in accordance with the first subparagraph, except for contracts where the parties are obliged by law to enter into them.

Amendment 11

Proposal for a directive

Article 4 – paragraph 1 – point 6

Directive (EU) 2024/1760

Article 11 – paragraph 7 – subparagraph 1 – introductory part

Text proposed by the Commission

Amendment

As regards actual adverse impacts as referred to in paragraph 1 that could not be prevented or adequately mitigated by the measures set out in paragraphs 3, 5 and 6, the company shall, as a last resort:

As regards actual adverse impacts as referred to in paragraph 1 that could not be brought to an end or the extent of which could not be minimised by the measures set out in paragraphs 3, 5 and 6, the company shall, as a last resort:

Amendment 12

Proposal for a directive

Article 4 – paragraph 1 – point 6

Directive (EU) 2024/1760

Article 11 – paragraph 7 – subparagraph 1 – point b

Text proposed by the Commission

Amendment

(b) where the law governing its relation with the business partner concerned so entitles it, adopt and implement an enhanced prevention action plan for the specific adverse impact without undue delay, provided that there is a reasonable expectation that those efforts will succeed, and

(b) where the law governing its relation with the business partner concerned so entitles it, adopt and implement an enhanced corrective action plan for the specific adverse impact without undue delay, provided that there is a reasonable expectation that those efforts will succeed, and

Amendment 13

Proposal for a directive

Article 4 – paragraph 1 – point 6

Directive (EU) 2024/1760

Article 11 – paragraph 7 – subparagraph 1 – point c

Text proposed by the Commission

Amendment

(c) use or increase its leverage through the suspension of the business relationship with respect to the activities concerned.

(c) use or increase its leverage, where possible, through the temporary suspension of the business relationship with respect to the activities concerned.

Amendment 14

Proposal for a directive

Article 4 – paragraph 1 – point 6

Directive (EU) 2024/1760

Article 11 – paragraph 7 – subparagraph 2

Text proposed by the Commission

Amendment

As long as there is a reasonable expectation that the enhanced prevention action plan will succeed, the mere fact of continuing to engage with the business partner shall not trigger the company’s liability.

As long as there is a reasonable expectation that the enhanced corrective action plan will succeed, the mere fact of continuing to engage with the business partner shall not trigger the company’s liability.

Amendment 15

Proposal for a directive

Article 4 – paragraph 1 – point 6

Directive (EU) 2024/1760

Article 11 – paragraph 7– subparagraph 3

Text proposed by the Commission

Amendment

Prior to suspending a business relationship, the company shall assess whether the adverse impacts from doing so can be reasonably expected to be manifestly more severe than the adverse impact that could not be prevented or adequately mitigated. Should that be the case, the company shall not be required to suspend the business relationship and shall be in a position to report to the competent supervisory authority about the duly justified reasons for such decision.

Prior to temporarily suspending a business relationship, the company shall assess, in consultation with relevant stakeholders, whether no available alternative to that business relationship, that provides a raw material, product or service essential to the company’s production of goods or provision of services, exists and the suspension would cause substantial prejudice to the company, or whether the adverse impacts from doing so can be reasonably expected to be manifestly more severe than the adverse impact that could not be brought to an end. Should that be the case, provided that the adverse impacts do not amount to serious violations of international human rights law, the company shall not be required to suspend the business relationship and shall refer to the competent supervisory authority to receive guidance on the course of action to take.

Amendment 16

Proposal for a directive

Article 4 – paragraph 1 – point 6

Directive (EU) 2024/1760

Article 11 – paragraph 7 – subparagraph 4

Text proposed by the Commission

Amendment

Member States shall provide for an option to suspend the business relationship in contracts governed by their laws in accordance with the first subparagraph, except for contracts where the parties are obliged by law to enter into them.

Member States shall provide for an option to suspend or terminate the business relationship in contracts governed by their laws in accordance with the first subparagraph, except for contracts where the parties are obliged by law to enter into them.

Amendment 17

Proposal for a directive

Article 4 – paragraph 1 – point 6

Directive (EU) 2024/1760

Article 11 – paragraph 7– subparagraph 6

Text proposed by the Commission

Amendment

Where the company decides not to suspend the business relationship pursuant to this Article, it shall monitor the potential adverse impact and periodically assess its decision and whether further appropriate measures are available.;

Where the company decides not to suspend the business relationship pursuant to this Article, it shall monitor the actual adverse impact and periodically assess its decision and whether further appropriate measures are available.;

ANNEX: DECLARATION OF INPUT

Pursuant to Article 8 of Annex I to the Rules of Procedure, the rapporteur for opinion declares that heshe included in hisher opinion input on matters pertaining to the subject of the file that heshe received, in the preparation of the opinion, prior to the adoption thereof in committee, from the following interest representatives falling within the scope of the Interinstitutional Agreement on a mandatory transparency register, or from the following representatives of public authorities of third countries, including their diplomatic missions and embassies:

1. Interest representatives falling within the scope of the Interinstitutional Agreement on a mandatory transparency register

Suomen Tekstiili ja Muoti ry

Finnwatch

Hitachi Energy

The Central Organisation of Finnish Trade Unions SAK

Global Witness

European Sustainable Investment Forum

Finnwatch ry

European Trade Union Confederation ETUC

Burson X

Akava, The Confederation of Unions for Professional and Managerial Staff in Finland

ACEA Auto

The Finnish Confederation of Professionals STTK

The Walt Disney Company

Finnish Development NGOs Fingo

Koch

United Nations Working Group on Business and Human Rights

Kaupan liitto

European Coalition for Corporate Justice

Nokia

Amnesty International

Teneo

European Central Bank

Elinkeinoelämän keskusliitto

Teknologiateollisuus ry

Atlantic Council

Japan Business Council in Europe

EESC

2. Representatives of public authorities of third countries, including their diplomatic missions and embassies

The list above is drawn up under the exclusive responsibility of the rapporteur for opinion.

Where natural persons are identified in the list by their name, by their function or by both, the rapporteur for opinion declares that heshe has submitted to the natural persons concerned the European Parliament's Data Protection Notice No 484 (https://www.europarl.europa.eu/data-protect/index.do), which sets out the conditions applicable to the processing of their personal data and the rights linked to that processing.

PROCEDURE – COMMITTEE ASKED FOR OPINION

Date announced in plenary

INTA

EMPL

31.3.2025

Date appointed

Mika Aaltola

Li Andersson

29.4.2025

16.4.2025

Discussed in committee

14.5.2025

4.6.2025

Date adopted

15.7.2025

4.9.2025

Result of final vote

0:

36

21

4

18

1

9

Members present for the final vote

Manon Aubry, Christophe Bay, Brando Benifei, Lynn Boylan, Anna Bryłka, Udo Bullmann, Benoit Cassart, Andi Cristea, Bart Groothuis, Enikő Győri, Svenja Hahn, Karin Karlsbro, Rudi Kennes, Rihards Kols, Sebastian Kruis, Bernd Lange, Ilia Lazarov, Miriam Lexmann, Jaak Madison, Gabriel Mato, Javier Moreno Sánchez, Ştefan Muşoiu, Daniele Polato, Majdouline Sbai, Lukas Sieper, Francesco Torselli, Inese Vaidere, Marie-Pierre Vedrenne, Catarina Vieira, Jörgen Warborn, Iuliu Winkler, Bogdan Andrzej Zdrojewski, Juan Ignacio Zoido Álvarez

Maravillas Abadía Jover, Li Andersson, Konstantinos Arvanitis, Nikola Bartůšek, Gabriele Bischoff, Vilija Blinkevičiūtė, David Casa, Estelle Ceulemans, Leila Chaibi, Henrik Dahl, Johan Danielsson, Mélanie Disdier, Niels Geuking, Sérgio Humberto, Martine Kemp, Katrin Langensiepen, Marit Maij, Marlena Maląg, Jagna Marczułajtis-Walczak, Idoia Mendia, Branislav Ondruš, Hristo Petrov, Dennis Radtke, Liesbet Sommen, Villy Søvndal, Georgiana Teodorescu, Romana Tomc, Jana Toom, Raffaele Topo, Francesco Torselli, Brigitte van den Berg, Marianne Vind, Mariateresa Vivaldini, Petar Volgin, Jan-Peter Warnke, Séverine Werbrouck

Substitutes present for the final vote

Mika Aaltola, Francisco Assis, Nina Carberry, Dariusz Joński, Cristina Maestre, Branislav Ondruš, Pierre Pimpie

Gordan Bosanac, Valérie Devaux, Kathleen Funchion, Rudi Kennes, Eugen Tomac

Members under Rule 216(7) present for the final vote

Hans Neuhoff

Lena Düpont, Sandra Gómez López, Elisabeth Grossmann, Jorge Martín Frías, Ana Catarina Mendes, Philippe Olivier, Michał Wawrykiewicz

FINAL VOTE BY ROLL CALL BY THE COMMITTEE ASKED FOR OPINION

Key to symbols:

No RCV took place