15 March 2024. The landmark text requires companies to prevent and address human rights and environmental impacts in their value chains. For many years, civil society has been calling for an improved European regulatory framework that outlines companies’ due diligence obligations with respect to human rights, the environment and climate, and establishes monitoring and access to justice mechanisms.
However, last-minute concessions have significantly weakened the text. The number of companies covered is marginal compared to the number of actors that pose risks to rights and the environment: only 5,500 very-large companies (0.05% of European companies) would be covered by the directive.
"This is a positive step towards a better protection of human rights and the environment. However, it is a shame to see such a lowering of ambitions. The Directive’s impact on victims and on populations affected by investment projects risks being too limited, and the exclusion of entire sectors deprives us of important levers", said Maddalena Neglia, Director of International Federation for Human Rights’s Business, Human Rights and Environment Desk.
This highlights that countries have been more concerned with protectionism and upcoming elections than protecting human rights or addressing climate change. Other last-minute concessions include the exclusion of part of the value chain, such as dismantling and recycling operations, from the due diligence obligation, and the removal of incentives for climate transition plans.
Such a reshuffle after the conclusion of the trilogues is unfortunate for the EU’s democratic process, and reveals a lack of ambition in tackling the societal challenges of our day. Nevertheless, the text remains a step in the right direction. The text endorsed today by the Member States still has to be voted on in the European Parliament before final adoption.