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BRUSSELS – The European Parliament has this week voted in favour of a draft bill governing the responsibilities of corporations towards human rights and the environment, known as the Corporate Sustainability Due Diligence Directive.

Many believe the Corporate Sustainability Due Diligence Directive has the potential to be a landmark piece of legislation governing the human rights responsibilities of larger companies within the EU.

The new laws will potentially ensure EU companies are held accountable for environmental and human rights transgressions in supply chains. 

Binding EU due diligence rules would oblige companies to identify, address and remedy aspects of their value chain (all operations, direct or indirect business relations, investment chains) that could infringe on human rights (including social, trade union and labour rights), the environment (contributing to climate change or deforestation, for example) and good governance (such as corruption and bribery).

European apparel brands have sprawling global operations, particularly across Asia where environmental and human rights abuses are common. However, there is at present no EU-wide requirement for them to have a due diligence process in place which would hold them accountable for supply chain transgressions.

Member of the European Parliament (PvdA / NL Labour Party) at European Parliament said: “The European Parliament’s support is a turning point in the thinking about the role of corporations in society. A corporate responsibility law must ensure that the future lies with companies that treat people and the environment in a healthy way – not with companies that have made a revenue model out of environmental damage and exploitation.

“Most companies take their duty towards people and the environment seriously. We help these companies with this ‘fair business law’. And at the same time we cut off those few large cowboy companies that flout the rules.”

The version passed by parliament will now be reconciled with those being considered by the EU Council and the EU Commission, before a final text on the legislation is produced later this year.

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