Joint Statement: Towards EU Due Diligence Rules that Work for All
The European Green Deal is now moving into the implementation and transposition phases which present significant complexity and therefore uncertainty. The Corporate Sustainability Due Diligence Directive (“CS3D”), undoubtedly the flagship legislation adopted under the Green Deal, is particularly ambitious in terms of its scope thereby creating challenging and impactful new obligations for businesses with global value chains and in some instances rife unintended repercussions for the real economy in the EU and in third countries.
As Mario Draghi rightly notes, Europe’s ambitious climate targets need to be matched by a coherent plan for competitiveness. Joint efforts will be required to help position Europe as more competitive and innovative on the global stage and build a prosperous economy for all European citizens, while ensuring that sustainability principles are respected.
We, the undersigned European associations representing companies and sectors impacted by the CS3D, welcome the European Commission’s intention to put administrative burden relief and simplification at the heart of its agenda. Focusing these upcoming interventions on the CS3D as a matter of priority is essential to support the competitiveness of businesses operating in the EU, in particular SMEs, which will be indirectly but considerably affected by the legislation.
Not doing so will create an uneven playing field, and potentially a race to the bottom. In addition, negative repercussions will also cascade down to value chain operators, most of which are in third countries that are already struggling to comply with the requirements of other Green Deal legislation.
With this in mind, the undersigned business associations call for the following priority actions:
1. Immediately launch a comprehensive competitiveness assessment of CS3D in consultation with businesses and their business associations, to identify and address priority areas where simplification, clarification and burden reduction should be achieved within upcoming implementing legislation and guidance.
2. Guidelines and implementing legislation should be adopted at least two years before compliance with legislation becomes mandatory or the transition period should be extended.
3. Harmonisation and interoperability of rules should remain key pillars in this phase to support Europe’s competitiveness and ensure a well-functioning Single Market.
Download the full statement below.