Two months after the first meeting of inter-institutional negotiations (trilogue) in September, the directive on Corporate Sustainability Due Diligence (see EUROPE 13192/10) will be debated again in trilogue on 22 November in Strasbourg. Negotiations were put on hold while the European Parliament’s rapporteur for the text, Lara Wolters (see EUROPE 13169/16), went on maternity leave.
This directive is designed to ensure that companies eliminate environmental and human rights violations in all areas of their activity.
But a two-month break has not erased the disagreements that exist at EU Council level over the scope of the text and the sectors concerned. The most sensitive point is still the inclusion of the financial sectors in the scope of the directive. Several countries were reluctant to accept the idea.
The seventh compromise, written at the time by the Czech Presidency of the EU Council, was adopted rather lukewarmly by the Member States (see EUROPE 13075/1).
In order to reach a consensus, the Czech Presidency proposed at the last minute to let each Member State decide, when transposing the directive into its own regulations, whether or not it wished to include the financial sectors. Austria, Belgium, Bulgaria, Estonia, Ireland, Lithuania, the Netherlands and Slovakia voted against this policy text.
Since then, the Spanish Presidency of the EU Council has returned with a modified position, with a view to the trilogue with the Parliament, which for its part has adopted a more ambitious text with a strengthened scope (see EUROPE 13164/4). And it has not hesitated to include the financial sectors, as well as the ‘value chain’ of these sectors (see EUROPE 13164/4).
The amended position, which EUROPE has been able to obtain, represents a major departure from the Parliament’s text and the Council’s previous approach.
It proposes that Member States completely exclude the financial sectors, by postponing the extension of the directive to these companies until a later date (revision clause) and after a detailed impact assessment has been carried out.
This proposal was nevertheless endorsed by the Member States, although not unanimously. According to several sources, at least four Member States, including Germany and Finland, would have preferred a more constructive option to include the financial sectors within the scope of the directive.
This total exclusion has been strongly criticised by a number of NGOs, who have drafted a letter to the Member States’ ambassadors to the EU stressing the “severe adverse impacts on human rights and the environment and climate” of the finance and investment sector.
See the Council’s amended proposal: https://aeur.eu/f/9ln
See the NGOs’ letter: https://aeur.eu/f/9lo (Original version in French by Isalia Stieffatre)