Due diligence reporting on human rights and environmental issues for EU companies

Subject: Due diligence reporting on human rights and environmental issues for EU companies

Parliament has repeatedly (in 2018, 2017 and 2016) called for enforceable EU legislation that would require European companies and companies operating in the EU to undertake mandatory human rights and environmental due diligence in their global operations and supply chains, as well as to enhance access to judicial remedy for victims harmed by corporate misconduct in the developing world.

Will the new Commission consider proposing a mandatory human rights and environmental due diligence regime for European companies and companies operating in the EU?

What concrete steps can be taken to ensure EU companies and those operating in the EU adhere to globally recognised human rights standards, and that they are accountable for the human rights or environmental risks and harms that they generate in their business operations?

Answer given by Mr Reynders on behalf of the European Commission

(12 March 2020)

The Commission is committed to delivering on the United Nations Sustainable Development Goals and the Paris Climate Agreement. It considers that businesses must behave responsibly, contribute to sustainable development and comply with human rights obligations.

It promotes responsible and sustainable supply chains through all policies. Regulations (EU) 995/2010 (1) and 2017/821 (2) contain sector specific due diligence requirements. Directive 2014/95/EU (3) and Regulation (EU) 2019/2088 (4) provide for due diligence reporting requirements. Regulations (EU) 1215/2012 (5) and 864/2007 (6) can, under certain conditions, benefit victims of corporate abuses in third countries.

In its communication on the European Green Deal (7), the Commission announced that it will, inter alia, review Directive 2014/95/EU and assess the need for additional measures to support deforestation-free value chains. It stressed EU’s ability to transform its economy and society and highlighted that sustainability should be further embedded into the corporate governance framework, as many companies still focus too much on short-term financial performance compared to their long-term development and sustainability aspects.

Under its 2018 Action Plan on Financing Sustainable Growth (8), the Commission contracted a study on due diligence requirements through the supply chain, also covering child labour. This study assesses the need for regulating due diligence in the area of human rights, environment and governance as well as options of doing so. One of the options explored is a legal duty of care at the European level. The results of this study (9) and the experience with the implementation of the existing EU due diligence rules, will inform the work of the Commission.

⋅1∙ https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32010R0995

⋅2∙ https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32017R0821

⋅3∙ https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32014L0095

⋅4∙ https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1576233593084&uri=CELEX%3A32019R2088

⋅5∙ https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=celex%3A32012R1215

⋅6∙ https://eur-lex.europa.eu/legal-content/en/ALL/?uri=CELEX%3A32007R0864

⋅7∙ COM(2019)640 final.

⋅8∙ https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52018DC0097

⋅9∙ https://ec.europa.eu/info/business-economy-euro/doing-business-eu/company-law-and-corporate-governance_en#studies