Rules that will require thousands of large companies to identify and mitigate human rights abuses like child labour or slavery, and environmental damage by suppliers have been given support by European Union lawmakers on Tuesday when its legal affairs committee voted to approve the draft EU corporate sustainability due diligence directive (CSDDD).
Under the cross-party agreement, lawmakers can now open negotiations with EU states, which have already reached a position among themselves, on a final version that would likely start to be rolled out in phases from around 2030.
Compliance will be demanded from EU companies that employ more than 250 people and have a turnover of more than 40 million euros ($44 million), a bigger net than EU states want.
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Non-EU companies from the United States and elsewhere with a net turnover of at least 40 million euros in the bloc would also be covered under the agreement that excluded small and medium sized companies from scope after opposition from centre-right parties.
Lawmakers backed a legal requirement for directors of companies with over 1,000 staff to be responsible for implementing a plan for cutting carbon emissions with member states empowered to set out penalties for breaches.
Lawmakers aim to start negotiations with EU states for a final deal by year end after a full parliament vote on Tuesday’s deal around June 1.
Financial services’ start date, and how many companies are within scope, will be key areas for negotiations with EU states, but climate lobbyists say some lawmakers could challenge parts of Tuesday’s deal during the June plenary vote.
Story was adapted from Reuters.
