ASI and EU Corporate Sustainability Due Diligence Directive (EU CSDDD)

12 April 2023

On 23 February 2022, the European Commission adopted a proposal for a Directive on corporate sustainability due diligence. The aim of this Directive is to foster sustainable and responsible corporate behaviour and to anchor human rights and environmental considerations in companies’ operations and corporate governance. The EU CSDDD, as well as other relevant EU legislation such as the Proposed Green Claims Directive, are a priority for ASI’s partnerships work this year. 

The Proposed Directive would impose a corporate due diligence duty on large EU and third-country companies, and smaller companies in certain ‘high-risk’ sectors, to identify and take steps to remedy actual and prevent or mitigate potential adverse impacts on human rights and the environment in the companies’ own operations, and their subsidiaries and value chains.

In the Proposal, companies ‘may refer to suitable industry initiatives or independent third-party verification’ to support the implementation of their due diligence obligations. The Commission and Member States may issue guidance for assessing the ‘fitness’ of industry schemes and multi-stakeholder initiatives and may facilitate the dissemination of information on such schemes or initiatives and their outcomes.

Many topics are still under discussion and key committees have adopted opinions that propose significant amendments and extensions to the Commission proposal, such as including the financial sector in the applicability scope, widening the requirements up to a value chain scope, and strengthening language regarding remediation and stakeholder engagement. The expectation is that there will be a plenary vote in May 2023 and inter-institutional negotiations during the second half of the year.  Once adopted, Member States will have two years to transpose the Directive into national law and communicate the relevant texts to the Commission.

The EU CSDDD, as well as other relevant EU legislation such as the Proposed Green Claims Directive, are a priority for ASI’s partnerships work this year.  Our work includes:

• Working closely with European Aluminium to understand the direction and implications of the Directive for the aluminium sector and ASI Members.
• Actively participating in the ISEAL Alliance’s Government Engagement and Policy Working Group, which supports coordination and joint action between ISEAL Members on key policy areas for sustainability systems in the EU and elsewhere. ASI supports ISEAL’s statement on the role of credible verification schemes within the EU CSDDD: https://www.isealalliance.org/get-involved/resources/iseal-recommendations-strengthening-role-credible-verification-and-multi
• ASI joined the OECD Multi-stakeholder Steering Group (MSG) for the Responsible Minerals Implementation Programme in April. The MSG works closely with the OECD Secretariat, providing guidance and support to operational aspects of the Responsible Minerals Implementation Programme, which aims to promote the implementation of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. The ASI Performance Standard V3 (2022) and its Guidance have been aligned with the OECD Due Diligence Guidance to meet LME Responsible Sourcing requirements. The first meeting of the expanded MSG will be on 25 April, in advance of the OECD Forum on Responsible Mineral Supply Chains.

ASI will continue to monitor the developments of the EU CSDDD and communicate more on this topic through the ASI newsletter following the expected plenary vote in May.

For any questions, please contact ASI Director of Partnerships, Marieke van der Mijn.

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