NFU Press Release: CSDDD approved by Parliament, awaits Council’s formal endorsement
Yesterday, in a pivotal decision, the European Parliament approved the Corporate Sustainability Due Diligence Directive (CSDDD), advancing corporate accountability for human rights and environmental impacts. NFU—Nordic Financial Unions, which represents close to 150,000 employees in the banking, finance, and insurance sectors across the Nordic countries, views this directive as an important step forward, albeit a compromised one.
The path to approving the CSDDD has been challenging, marked by delays and significant opposition since the initial agreement in December 2023. Nevertheless, the European Parliament’s recent endorsement of the CSDDD represents a major milestone in the EU’s efforts to promote responsible business practices. This directive is a crucial step forward in protecting human rights and the environment from the negative effects of business operations.
NFU General Secretary Carin Hallerström said:
The Parliament’s approval is truly a milestone in ensuring corporate responsibility throughout the value chain. It marks significant progress, setting the stage for the comprehensive measures we continue to advocate for.
Financial undertakings (e.g., banks, insurers, institutional investors, asset managers) are not included under the full scope of the CSDDD. They are only subject to due diligence obligations for the upstream part of their value chain. However, these financial undertakings are required to adopt and implement transition plans, as well as report on human rights and environmental due diligence, as per the Corporate Sustainability Reporting Directive (CSRD).
The directive mandates stringent penalties for non-compliance, including fines of up to 5% of annual turnover for the most severe breaches, highlighting the EU’s commitment to vigorously enforcing these regulations. Additionally, it specifies that companies are ultimately responsible for conducting due diligence. The directive also grants member states some flexibility in how these principles are implemented to ensure adherence to the core principles of the directive.
We urge the European Council to promptly endorse this directive, ensuring that it solidifies as a cornerstone of Europe’s commitment to sustainable and ethical business practices.
Carin Hallerström continued:
NFU will continue to advocate for robust, enforceable standards that foster a sustainable and equitable corporate landscape. This directive should not represent the peak of our ambitions but rather the foundation from which we must continue to build.
The European Council is expected to formally endorse the CSDDD on 23 May 2024, as the final step in the legislative process. It will enter into force twenty days later. Member States will have two years to transpose the new rules into their national laws.
