The EU’s proposed Corporate Sustainability Due Diligence Directive (CS3D) faced an uphill battle during its development. The legislation was substantially reworked during its development due to disagreements about including the financial sector and certain climate transition requirements. Recently, it looked like a solid compromise was reached with a provisional agreement; however, the fate of the bill is once again in jeopardy as a final vote scheduled for February 9th was postponed indefinitely. Responsible Investor reports:
“It has just been confirmed that the vote has taken off today’s so-called “Coreper” agenda and will be rescheduled for a later date, yet to be announced. The surprise delay is somewhat symbolic of the difficult journey of the directive – which will introduce mandatory human rights and environmental due diligence requirements on companies in scope – through the various EU legislative hoops.”
The article notes that at the center of the controversy is an abstention from Germany, opposition from Sweden and Finland, with Italy undecided. If the directive had gone to a vote and failed, the law probably would not have a second shot at passage before the EU’s summer elections introduce a new government – delaying the legislation even further. While we don’t know when the CS3D vote will occur, it is possible that the decision to delay the vote was made so that changes could be made and support shored up before the change of government.
If you aren’t already subscribed to our complimentary ESG blog, sign up for daily updates here: https://practicalesg.com/subscribe/
