24 April 2024 — News
Statement
Accountancy Europe welcomes the final approval of the Corporate Sustainability Due Diligence Directive (CSDDD) by the European Parliament (EP) and the Council. After more than two years of legislative process, Member States will be able to start transposing the Directive into national laws in 2024, and businesses can get prepared.
The Directive is a pivotal step towards more corporate accountability, advancing human rights and environmental protection whilst creating a level playing field for companies in the EU.
We regret, however that important provisions have been weakened or deleted from the text due to short-term political considerations in the Council. We therefore fear that the ambition is no longer the same.
(…) important corporate governance elements that would put Directors in control of the transition have been removed. Having the companies’ Directors involved in the process, for example through financial incentives to deliver on sustainability targets, would have been an essential means to ensure that they drive change within companies. This is already a practice in some businesses. Having it enshrined in law would have ensured a level playing field between European companies and equipped Directors to take effective action.
Olivier Boutellis-Taft, Accountancy Europe CEO.
Nevertheless, the CSDDD is still a landmark piece of legislation and a significant step forward in advancing responsible business practices and ensuring that business models are aligned with ambitious sustainability targets. European businesses will gain more insights into their supply chains and be able to apply a risk-based approach to address risks in their operations.
We welcome the reinforced provisions on supporting SMEs with potential spill-over effects, although future experience will show what additional SME support measures will be necessary. Other positive aspects include the requirement for companies to set up transition plans to align the business strategy with a sustainable economy, and the possibility for victims to pursue their case in front of European Courts. Additional elements of the CSDDD can be amended later in time to better align it with the needs of the sustainable transition.
Accountancy Europe hopes that this legislation will foster fairer business operations, offer better protection for human rights and the environment worldwide, and help European business to become more fit for the future.
