On the proposal for a directive of the European Parliament and of the Council on Corporate Sustainability Due Diligence and amending Directive (EU) 2019/1937
ENVI-AD-734465
Committee on the Environment, Public Health and Food Safety · Rapporteur: Tiemo Wölken
Written by a language model from the full text only; every figure comes from the text. The paragraph links open the paragraph a statement rests on — check the text itself before relying on it.
The Committee on the Environment, Public Health and Food Safety proposes amendments to the proposed directive on Corporate Sustainability Due Diligence. It lowers the employee and turnover thresholds so more companies are covered, and extends due diligence to all business relationships in the value chain.¶¶¶ It adds environmental and climate impacts, animal welfare, the 'One Health' approach and the polluter pays principle to the scope, and requires companies to adopt a climate transition plan aligned with the 1.5 °C goal and climate neutrality by 2050.¶¶¶ It requires companies to engage stakeholders, set up complaint mechanisms, and gives directors responsibility for due diligence and the climate transition plan, with variable remuneration linked to the plan for companies with more than 1000 employees.¶¶¶ It adds new definitions, including adverse environmental impact categories, adverse animal welfare impact, science-based targets and human rights and environmental defenders, and expands the list of international conventions in the Annex.¶¶¶
Committee position. The committee proposes amendments to the Commission proposal, lowering the thresholds so more companies are covered, extending due diligence to all business relationships, adding environmental, climate and animal welfare impacts, and requiring a climate transition plan and stakeholder engagement.¶¶¶
Key points
- The directive should cover companies with more than 250 employees and a net worldwide turnover of more than EUR 40 million, and third-country companies with a net worldwide turnover of more than EUR 40 million.¶¶¶
- Due diligence should cover all business relationships in the value chain, not only 'established' ones, and the definition of 'established business relationship' is deleted.¶¶¶
- High-impact sectors are expanded to include fur, animal products, water supply, land and resource management, nature conservation, and the energy sector including nuclear and radioactive waste.¶¶¶
- Companies covered by the Corporate Sustainability Reporting Directive or the EU Emissions Trading System are also brought within scope.¶¶
- Adverse environmental impact is defined by six categories: climate change mitigation, climate change adaptation, sustainable use and protection of soil, water and marine resources, transition to a circular economy, pollution prevention and control, and protection and restoration of biodiversity and ecosystems.¶¶
- New definitions are added for adverse animal welfare impact, the polluter pays principle, the 'One Health' approach, science-based targets, human rights and environmental defenders, and social partners.¶¶¶
- Companies must carry out a broad scoping exercise and in-depth assessments to identify adverse impacts, and Member States must make appropriate resources available to them.¶¶
- Companies must develop prevention and mitigation action plans and corrective action plans in consultation with stakeholders, and may prioritise impacts where it is not feasible to address all at once.¶¶¶
- Companies must effectively and meaningfully engage stakeholders, publish an engagement strategy, provide information, and set up complaint mechanisms protecting against retaliation and Strategic Lawsuits Against Public Participation.¶
- Companies must adopt a climate transition plan aligned with limiting global warming to 1.5 °C and climate neutrality by 2050, including time-bound targets for scope 1, 2 and where relevant 3 emissions for 2030 and in five-year steps up to 2050.¶¶
- Directors must integrate adverse impacts into decisions on sustainability matters, oversee due diligence and the climate transition plan, and for companies with more than 1000 employees part of variable remuneration must be linked to the transition plan, approved by the Annual General Meeting.¶¶¶
- The Commission must issue guidelines in a digital and easily accessible format free of charge, and country fact-sheets, and report on implementation four years after entry into force.¶¶¶
Who is affected
- EU companies with more than 250 employees and turnover above EUR 40 million, which must comply with due diligence.¶¶
- Third-country companies with a net worldwide turnover of more than EUR 40 million, which are brought within scope.¶¶¶
- Companies in high-impact sectors including textiles, agriculture, fisheries, mineral resources and energy, which face expanded coverage.¶¶¶
- Directors, who become responsible for due diligence and the climate transition plan, with variable remuneration linked to the plan for large companies.¶¶¶
- Stakeholders, including human rights and environmental defenders, who gain rights to information, engagement and complaint mechanisms.¶¶
Figures and deadlines
- more than 250 employees on average, the threshold for companies covered by due diligence.¶¶
- EUR 40 million, the net worldwide turnover threshold for companies covered.¶
- at least 55% by 2030, the emission reduction commitment cited from the European Climate Law.¶
- 1.5 °C, the global warming limit the climate transition plan must align with.¶¶
- 2050, the deadline for climate neutrality and for environmentally sustainable, climate-neutral and resilient health systems.¶
- more than 1000 employees on average, the threshold for companies required to link variable remuneration to the transition plan.¶
- 4 years after the date of entry into force, the deadline for the Commission's implementation report.¶
- 18 months after the date of entry into force, the deadline for making the guidelines available.¶
Legal basis: Article 191 of the Treaty on the Functioning of the European Union.¶