The Belgian Presidency has decided to postpone the vote on the Corporate Sustainability Due Diligence Directive (CSDDD) in the Council of the EU today (9 February), following the German announcement of abstention and the need for further discussions between the EU -Member States.
Just on Wednesday, the Institutional Investors Group on Climate Change, the Principles for Responsible Investment and the European Sustainable Investment Forum urged EU member states to maintain their commitment to CSDDD.
The agreement, they said, was in practice “proportionate and workable” for companies in the scope, providing them with a clear and consistent sustainability due diligence framework across the EU that supports risk management and long-term business viability. They also stated that CSDDD “will play a crucial role in delivering the EU Green Deal”, which is fundamentally intertwined with the EU’s competitiveness, security and resilience.
But the discussions surrounding the CSDDD have stalled. Support in Germany is wavering, with Finance Minister Christian Lindner write on X (formerly Twitter) that “it would place a huge burden on companies without safe progress on human rights and the environment” and “Germany is clearly far from alone in its concerns.” In addition to Germany, Italy was also expected to abstain from voting on CSDDD, which has led to delays while member states continue to discuss the agreement.
Isabella Ritter, EU policy officer at ShareAction, said the decision to postpone the vote on CSDDD was “outrageous” and the delay “a leadership failure”, putting lives and the well-being of the planet at risk.
“It [CSDDD] is a landmark piece of legislation with the power to improve global human rights and environmental protection, which has been blocked by member states, led by Germany. The stakes are too high and we urge all EU Member States to go beyond self-interest, come back to the table and ensure that this crucial law is passed as soon as possible,” she continued.
“Looking ahead to the next vote in the COREPER meeting, ShareAction calls on the Belgian Presidency to quickly tackle and overcome this bloc and get the green light from the EU Member States as soon as possible. The CSDDD is more than a piece of legislation; it is about shaping the future of corporate responsibility and sustainability practices in the EU and beyond.”
Kendall Reid, ESG director at corporate intelligence firm S-RM, added: “This outcome has a significant impact on the European agenda on human rights, the environment and climate change. Despite initial optimism, reports of opposition to the CSDDD have emerged from certain EU Member States, casting doubt on its future.
“A critical question now looms over the trajectory of ESG regulation in the EU, especially with the European Parliament elections in June. As we await further developments, it is quite clear that the road ahead to address human rights and environmental concerns may be long.”
However, Silke Goldberg, global head of ESG at law firm Herbert Smith Freehills, said there are “high expectations that this is nothing more than a stumbling block”.
“So much work has gone into developing the CSDDD, only a brick wall has been erected where most legislators and politicians expected to see an open door.
“At first glance it appears that there are concerted efforts to prevent the new directive from seeing the light of day, but it is not that simple. There are a number of countries with their own plans, which indicates that there should be no doubt; Environmental and human rights due diligence is – and remains – a legislative priority. After all, the risks associated with this will be great for the environment and for companies.”