A study carried out by the British Institute of International and Comparative Law, Civic Consulting and LSE Consulting, commissioned by the Commission and published on Monday 24 February, points to the need for EU rules on due diligence in companies' supply chains.
The concept of 'due diligence' refers to a set of procedures for companies to "identify, prevent, mitigate and report" on the negative impacts they may have on human rights and the environment. This may involve a company checking, for example, that its suppliers do not use child labour or that they do not dump waste into rivers.
Indeed, the study shows that while the due diligence standard of the UN Guidelines is increasingly being introduced into Member States' legal standards, only one in three businesses in the EU are currently undertaking due diligence that takes into account all human rights and environmental impacts.
For example, 70% of the 334 business survey respondents agreed that EU-level regulation on a general due diligence requirement for human rights and environmental impacts could provide benefits for business, the report says.
The study assesses the impacts of a range of options, from no intervention to due diligence as a legal standard.
For the introduction, at European level, of a duty of diligence, it proposes several regulatory options, namely a regulation: - limited to specific sectors; - applicable horizontally to all sectors; - limited to a defined set of large companies; - applicable to all companies; - or a general duty for all companies with additional obligations specific to large companies.
The measure is also called for by the European Parliament, which, in its May 2018 report on sustainable finance, invited the Commission to draw up a legislative proposal to establish a general and binding framework on the principle of due diligence (see EUROPE 12029/6).
See the study: https://bit.ly/32nOhRR (Original version in French by Marion Fontana)