In a statement released on 2 September 2020, 26 companies, business associations, and initiatives express their support for new EU mandatory human rights and environmental due diligence legislation. Commissioner for Justice Didier Reynders had announced plans for such legislation in April.
The regulation would oblige companies to practice corporate due diligence. This means that companies would have to identify and prevent adverse impacts in a company’s activities and in its value chain. Moreover, Didier Reynerds emphasized that directors, importantly, have a duty of care to integrate stakeholder’s interests.
A unified approach has clear advantages over patchwork regulations that differ across member states. A study on due diligence requirements through the supply chain has shown that stakeholders acknowledge such advantages. Drawing from the study, Didier Reynerds cites advantages of a unified approach: legal certainty, a single harmonized standard in place of different approaches in the Member States, levelling the playing field and increased leverage on supply chains in third countries.
The Commission is expected to present the final proposal next year. Meanwhile, interest groups and think tanks can make suggestions and proposals. For example, the European Coalition for Corporate Justice has proposed an interesting model legislation here.