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A child works at a garment factory in Dhaka, Bangladesh on October 26, 2023.
While praising "important" new environmental and human rights policies, campaigners also warn about loopholes and shortcomings.
Despite some loopholes, global campaigners on Thursday still celebrated European Union policymakers' agreement to establish rules requiring large corporations to identify and address their negative impacts on human rights and the environment.
Amnesty International policy adviser on business and human rights Hannah Storey said that by striking a deal on the Corporate Sustainability Due Diligence Directive (CSDDD), "the E.U. has sent a strong signal that big business in Europe should no longer ignore negative human rights impacts, wherever they might occur."
"It means people suffering in Nigeria from disastrous oil pollution, or those forced to labor on palm oil plantations in Indonesia, or communities forcibly evicted to make way for cobalt mines in the Democratic Republic of the Congo, may finally have a route to hold large European companies to account for their human rights harms," she stressed.
"This is a bittersweet moment for those who seek to hold multinational companies accountable for their impacts."
Arianne Griffith, corporate accountability lead at Global Witness, highlighted that the "groundbreaking new law... could finally curb the unchecked power big companies have enjoyed for so long. It will mean Europe's biggest polluters—including fossil fuel majors—will need to reduce their climate emissions and gives people who are at risk from dangerous business practices a chance to fight back."
Specifically, as a statement from the European Parliament explains, the draft law requires firms "to adopt a plan ensuring their business model complies with limiting global warming to 1.5°C," the Paris climate agreement's more ambitious temperature goal for this century.
The legislation also "sets obligations for companies to mitigate their negative impact on human rights and the environment such as child labor, slavery, labor exploitation, pollution, deforestation, excessive water consumption, or damage to ecosystems," the statement details. "They will have to integrate so-called 'due diligence' into their policies and risk-management systems, including descriptions of their approach, processes, and code of conduct."
The agreement was reached by negotiators for parliament and the Council of the E.U. It still needs formal approval from the Legal Affairs Committee and then both bodies, after which member states will have to work the CSDDD into national legislation.
"This law is a historic breakthrough. Companies are now responsible for potential abuses in their value chain, 10 years after the Rana Plaza tragedy," MEP Lara Wolters of the Netherlands said after the negotiations, referring to a Bangladesh building collapse that killed over 1,100 people, mostly garment workers.
"Let this deal be a tribute to the victims of that disaster, and a starting point for shaping the economy of the future—one that puts the well-being of people and the planet before profits and short-termism," she added. "I am very grateful to those who joined me in the fight for this law. It ensures honest businesses do not have to participate in the race against cowboy companies."
While welcoming the deal, campaigners also noted its shortcomings. Storey said that "this new law sets important human rights requirements for companies—which Amnesty International has long campaigned for—but the E.U. has failed to go far enough."
"Companies producing potentially dangerous products, including weapons and spyware, will not be required to assess how end users may use their products to harm human rights," she noted. "Exemptions for the financial sector mean investors could continue to fund projects which harm people and planet, and the CSDDD only applies to very large companies, meaning many others will be able to continue harming human rights unchecked."
The new policy will apply to E.U. firms and parent companies with over 500 employees and a global turnover higher than €150 million ($165 million) as well as corporations with more than 250 employees and a turnover topping €40 million ($44 million) if at least €20 million ($22 million) comes from "manufacture and wholesale trade of textiles, clothing and footwear, agriculture including forestry and fisheries, manufacture of food and trade of raw agricultural materials, extraction and wholesale trade of mineral resources or manufacture of related products and construction."
It will also apply to non-E.U. companies with €300 million ($330 million) net turnover generated in the bloc, three years from the directive's entry into force. Reutersreported Thursday that "the law has raised corporate hackles as far afield as the United States because its scope encompasses several thousand companies that do business in the bloc but are headquartered elsewhere."
There was also pushback from the financial sector. When countries including France and Spain were fighting to exclude the banking and investment industries during talks last month, one E.U. diplomat quipped to Politico, "I always thought that a trilogue is between council, parliament, and the commission, but it seems the financial services sector is now an E.U. institution as well."
According to E.U. negotiators, under the deal, "the financial sector will be temporarily excluded from the scope of the directive, but there will be a review clause for a possible future inclusion of this sector based on a sufficient impact assessment."
Global Reporting Initiative CEO Eelco van der Enden said, "Our hope is that, as we move forward, the review clause will offer an opportunity to include both upstream and downstream activities of financial institutions within the scope of the CSDDD."
Griffith of Global Witness, meanwhile, declared that "it's shocking that member states have sunk plans to ensure that banks stop investing in environmental and human rights abuses."
Friends of the Earth Europe climate campaigner Alban Grosdidier said that "this is a bittersweet moment for those who seek to hold multinational companies accountable for their impacts," describing the deal as "an important milestone towards justice" while also calling out France and Germany for "blocking and watering down key provisions."
"In particular," he added, "the exclusion of climate liability robs people from a much-needed course of action against cynical multinational corporations selling off our climate's future for short-term profits, and the exemption of financial services banks can keep on banking on human rights violations."
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Despite some loopholes, global campaigners on Thursday still celebrated European Union policymakers' agreement to establish rules requiring large corporations to identify and address their negative impacts on human rights and the environment.
Amnesty International policy adviser on business and human rights Hannah Storey said that by striking a deal on the Corporate Sustainability Due Diligence Directive (CSDDD), "the E.U. has sent a strong signal that big business in Europe should no longer ignore negative human rights impacts, wherever they might occur."
"It means people suffering in Nigeria from disastrous oil pollution, or those forced to labor on palm oil plantations in Indonesia, or communities forcibly evicted to make way for cobalt mines in the Democratic Republic of the Congo, may finally have a route to hold large European companies to account for their human rights harms," she stressed.
"This is a bittersweet moment for those who seek to hold multinational companies accountable for their impacts."
Arianne Griffith, corporate accountability lead at Global Witness, highlighted that the "groundbreaking new law... could finally curb the unchecked power big companies have enjoyed for so long. It will mean Europe's biggest polluters—including fossil fuel majors—will need to reduce their climate emissions and gives people who are at risk from dangerous business practices a chance to fight back."
Specifically, as a statement from the European Parliament explains, the draft law requires firms "to adopt a plan ensuring their business model complies with limiting global warming to 1.5°C," the Paris climate agreement's more ambitious temperature goal for this century.
The legislation also "sets obligations for companies to mitigate their negative impact on human rights and the environment such as child labor, slavery, labor exploitation, pollution, deforestation, excessive water consumption, or damage to ecosystems," the statement details. "They will have to integrate so-called 'due diligence' into their policies and risk-management systems, including descriptions of their approach, processes, and code of conduct."
The agreement was reached by negotiators for parliament and the Council of the E.U. It still needs formal approval from the Legal Affairs Committee and then both bodies, after which member states will have to work the CSDDD into national legislation.
"This law is a historic breakthrough. Companies are now responsible for potential abuses in their value chain, 10 years after the Rana Plaza tragedy," MEP Lara Wolters of the Netherlands said after the negotiations, referring to a Bangladesh building collapse that killed over 1,100 people, mostly garment workers.
"Let this deal be a tribute to the victims of that disaster, and a starting point for shaping the economy of the future—one that puts the well-being of people and the planet before profits and short-termism," she added. "I am very grateful to those who joined me in the fight for this law. It ensures honest businesses do not have to participate in the race against cowboy companies."
While welcoming the deal, campaigners also noted its shortcomings. Storey said that "this new law sets important human rights requirements for companies—which Amnesty International has long campaigned for—but the E.U. has failed to go far enough."
"Companies producing potentially dangerous products, including weapons and spyware, will not be required to assess how end users may use their products to harm human rights," she noted. "Exemptions for the financial sector mean investors could continue to fund projects which harm people and planet, and the CSDDD only applies to very large companies, meaning many others will be able to continue harming human rights unchecked."
The new policy will apply to E.U. firms and parent companies with over 500 employees and a global turnover higher than €150 million ($165 million) as well as corporations with more than 250 employees and a turnover topping €40 million ($44 million) if at least €20 million ($22 million) comes from "manufacture and wholesale trade of textiles, clothing and footwear, agriculture including forestry and fisheries, manufacture of food and trade of raw agricultural materials, extraction and wholesale trade of mineral resources or manufacture of related products and construction."
It will also apply to non-E.U. companies with €300 million ($330 million) net turnover generated in the bloc, three years from the directive's entry into force. Reutersreported Thursday that "the law has raised corporate hackles as far afield as the United States because its scope encompasses several thousand companies that do business in the bloc but are headquartered elsewhere."
There was also pushback from the financial sector. When countries including France and Spain were fighting to exclude the banking and investment industries during talks last month, one E.U. diplomat quipped to Politico, "I always thought that a trilogue is between council, parliament, and the commission, but it seems the financial services sector is now an E.U. institution as well."
According to E.U. negotiators, under the deal, "the financial sector will be temporarily excluded from the scope of the directive, but there will be a review clause for a possible future inclusion of this sector based on a sufficient impact assessment."
Global Reporting Initiative CEO Eelco van der Enden said, "Our hope is that, as we move forward, the review clause will offer an opportunity to include both upstream and downstream activities of financial institutions within the scope of the CSDDD."
Griffith of Global Witness, meanwhile, declared that "it's shocking that member states have sunk plans to ensure that banks stop investing in environmental and human rights abuses."
Friends of the Earth Europe climate campaigner Alban Grosdidier said that "this is a bittersweet moment for those who seek to hold multinational companies accountable for their impacts," describing the deal as "an important milestone towards justice" while also calling out France and Germany for "blocking and watering down key provisions."
"In particular," he added, "the exclusion of climate liability robs people from a much-needed course of action against cynical multinational corporations selling off our climate's future for short-term profits, and the exemption of financial services banks can keep on banking on human rights violations."
Despite some loopholes, global campaigners on Thursday still celebrated European Union policymakers' agreement to establish rules requiring large corporations to identify and address their negative impacts on human rights and the environment.
Amnesty International policy adviser on business and human rights Hannah Storey said that by striking a deal on the Corporate Sustainability Due Diligence Directive (CSDDD), "the E.U. has sent a strong signal that big business in Europe should no longer ignore negative human rights impacts, wherever they might occur."
"It means people suffering in Nigeria from disastrous oil pollution, or those forced to labor on palm oil plantations in Indonesia, or communities forcibly evicted to make way for cobalt mines in the Democratic Republic of the Congo, may finally have a route to hold large European companies to account for their human rights harms," she stressed.
"This is a bittersweet moment for those who seek to hold multinational companies accountable for their impacts."
Arianne Griffith, corporate accountability lead at Global Witness, highlighted that the "groundbreaking new law... could finally curb the unchecked power big companies have enjoyed for so long. It will mean Europe's biggest polluters—including fossil fuel majors—will need to reduce their climate emissions and gives people who are at risk from dangerous business practices a chance to fight back."
Specifically, as a statement from the European Parliament explains, the draft law requires firms "to adopt a plan ensuring their business model complies with limiting global warming to 1.5°C," the Paris climate agreement's more ambitious temperature goal for this century.
The legislation also "sets obligations for companies to mitigate their negative impact on human rights and the environment such as child labor, slavery, labor exploitation, pollution, deforestation, excessive water consumption, or damage to ecosystems," the statement details. "They will have to integrate so-called 'due diligence' into their policies and risk-management systems, including descriptions of their approach, processes, and code of conduct."
The agreement was reached by negotiators for parliament and the Council of the E.U. It still needs formal approval from the Legal Affairs Committee and then both bodies, after which member states will have to work the CSDDD into national legislation.
"This law is a historic breakthrough. Companies are now responsible for potential abuses in their value chain, 10 years after the Rana Plaza tragedy," MEP Lara Wolters of the Netherlands said after the negotiations, referring to a Bangladesh building collapse that killed over 1,100 people, mostly garment workers.
"Let this deal be a tribute to the victims of that disaster, and a starting point for shaping the economy of the future—one that puts the well-being of people and the planet before profits and short-termism," she added. "I am very grateful to those who joined me in the fight for this law. It ensures honest businesses do not have to participate in the race against cowboy companies."
While welcoming the deal, campaigners also noted its shortcomings. Storey said that "this new law sets important human rights requirements for companies—which Amnesty International has long campaigned for—but the E.U. has failed to go far enough."
"Companies producing potentially dangerous products, including weapons and spyware, will not be required to assess how end users may use their products to harm human rights," she noted. "Exemptions for the financial sector mean investors could continue to fund projects which harm people and planet, and the CSDDD only applies to very large companies, meaning many others will be able to continue harming human rights unchecked."
The new policy will apply to E.U. firms and parent companies with over 500 employees and a global turnover higher than €150 million ($165 million) as well as corporations with more than 250 employees and a turnover topping €40 million ($44 million) if at least €20 million ($22 million) comes from "manufacture and wholesale trade of textiles, clothing and footwear, agriculture including forestry and fisheries, manufacture of food and trade of raw agricultural materials, extraction and wholesale trade of mineral resources or manufacture of related products and construction."
It will also apply to non-E.U. companies with €300 million ($330 million) net turnover generated in the bloc, three years from the directive's entry into force. Reutersreported Thursday that "the law has raised corporate hackles as far afield as the United States because its scope encompasses several thousand companies that do business in the bloc but are headquartered elsewhere."
There was also pushback from the financial sector. When countries including France and Spain were fighting to exclude the banking and investment industries during talks last month, one E.U. diplomat quipped to Politico, "I always thought that a trilogue is between council, parliament, and the commission, but it seems the financial services sector is now an E.U. institution as well."
According to E.U. negotiators, under the deal, "the financial sector will be temporarily excluded from the scope of the directive, but there will be a review clause for a possible future inclusion of this sector based on a sufficient impact assessment."
Global Reporting Initiative CEO Eelco van der Enden said, "Our hope is that, as we move forward, the review clause will offer an opportunity to include both upstream and downstream activities of financial institutions within the scope of the CSDDD."
Griffith of Global Witness, meanwhile, declared that "it's shocking that member states have sunk plans to ensure that banks stop investing in environmental and human rights abuses."
Friends of the Earth Europe climate campaigner Alban Grosdidier said that "this is a bittersweet moment for those who seek to hold multinational companies accountable for their impacts," describing the deal as "an important milestone towards justice" while also calling out France and Germany for "blocking and watering down key provisions."
"In particular," he added, "the exclusion of climate liability robs people from a much-needed course of action against cynical multinational corporations selling off our climate's future for short-term profits, and the exemption of financial services banks can keep on banking on human rights violations."