12 November 2024
Lessons of a Landmark Lost
On 12 November 2024, the Hague Court of Appeal in Shell v Milieudefensie set aside the preceding 2021 judgment which held Shell responsible for its contribution to climate change. The 2021 judgment was widely heralded (though also critiqued) as groundbreaking and a precedent that could be followed elsewhere. While the Appeal judgment is unlikely to receive similar praise from climate activists, it contains important lessons regarding the responsibility of multinational companies for their contributions to climate change. Continue reading >>
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13 June 2024
The Unintended Consequences of Mandatory Due Diligence
The EU Corporate Sustainability Due Diligence Directive (CSDDD) seeks improvements in companies’ societal impacts but carries risks of negative impacts, including on the developing countries where some supposed beneficiaries are located. Does the CSDDD recognise and mitigate such risks? The blog identifies provisions in the CSDDD that address the unintended consequences that mandatory human rights and environmental due diligence requirements might have in developing countries. Continue reading >>
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25 May 2024
Harmonization Pains but Stakeholders’ Gain
The Article 13 EU Corporate Sustainability Due Diligence Directive is home of the meaningful engagement provision. It is significantly more robust than similar provisions in national due diligence legislation in France, Germany and Norway. Despite the fact that a number of differences between EU CSDDD and these national laws is likely to give rise to some “harmonization pains”, one silver lining exists: stakeholders gain some leverage. Continue reading >>
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06 April 2023
Corporate Duty of Vigilance and Environment
On February 23, 2023, French bank BNP Paribas was sued before the civil tribunal in Paris for having allegedly breached its environmental duty of vigilance. In particular, deficiencies in the vigilance plan related to the allocation fundraising activities are criticized. This climate litigation, involving a French bank for the first time, could increase the liability of financial protagonists in the fight against climate change if it succeeded. Nevertheless, one may doubt that the case against BNP Paribas will prove to be successful, as previous ones – which had been introduced under the 2017 law of vigilance (LdV) – are all either pending or unsuccessful. Continue reading >>
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26 October 2022
A Defining Moment for the UN Business and Human Rights Treaty Process
The ongoing process to negotiate a UN treaty on business and human rights has its 8th annual session this week in Geneva. Though embraced by many NGOs, this initiative has so far failed to secure widespread support amongst states with wide divergences remaining regarding the proposed instrument’s objectives and design, as well as its relationship to the UN 2011 Guiding Principles on Business and Human Rights, an earlier soft law instrument championed by governments, businesses and international actors. Yet there may be light on the horizon. Continue reading >>
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16 March 2022
Enforcing Due Diligence Obligations
The Corporate Sustainability Due Diligence Directive creates an innovative mix of enforcement mechanisms. It relies on both administrative oversight and judicial enforcement through civil liability. Additionally, accountability of businesses for affecting stakeholder interests is strengthened by a specific environmental, social, and corporate governance duty of care for directors and obligations to link directors’ pay to climate obligations, thus ensuring that directors need to steer businesses in light of stakeholder interests. This system has the potential to effectively oblige companies to respect stakeholder interests, although some weaknesses, especially in access to justice, remain. Continue reading >>
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15 March 2022
Due Diligence Around the World
On 23 February 2022, the EU Commission released its draft Directive on Corporate Sustainability Due Diligence (CSDDD). It follows – and seemingly takes inspiration from – several national mandatory human rights and environmental due diligence (HREDD) laws, notably in France, (“LdV”) Germany (“GSCDDA”) and Norway (“Transparency Act”). It provides a strong legal basis and innovations to enhance corporate accountability, to strengthen stakeholder value and to create a European and possibly global standard for responsible and sustainable business conduct. Continue reading >>
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02 March 2022
Der unsichtbare Dritte
Durch die Richtlinie zu Sorgfaltspflichten in der Lieferkette sollen große Unternehmen in der EU dazu verpflichtet werden, Menschenrechts- und Umweltstandards in der Lieferkette einzuhalten. Doch wer stellt sicher, dass Zulieferer, die nicht selten über die ganze Welt verteilt sind, diese Standards auch wirklich erfüllen? Der Entwurf für die Richtlinie, den die Kommission in der vergangenen Woche veröffentlicht hat, setzt dafür maßgeblich auf unabhängige Dritte: die wiederum privatwirtschaftlichen Zertifizierer. Diese Strategie fördert aber nicht nur Private als „Ersatzbehörden“, die selbst kaum reguliert sind, sondern könnte auch die Marktkonzentration ohnehin schon großer Unternehmen weiter verstärken. Continue reading >>24 February 2022
Green(wash)ing Global Commodity Chains
Yesterday, the EU Commission finally published its proposal for a corporate sustainability due diligence directive – nearly a year after the Parliament’s resolution to the same effect. Tensions were running high among policymakers, businesses, and civil society alike following several delays, DG Internal Market weighing in on the DG Justice file, and two negative verdicts by the obscure Regulatory Scrutiny Board. Have these distortions left their mark on the final text, as many had feared? Yes and no, as I shall explain, focusing on the proposal’s operative environmental dimension. Continue reading >>
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21 February 2022
Quantifying ‘Better Regulation’
The EU Commission is expected to publish later this month its long-awaited proposal on Sustainable Corporate Governance, an initiative to ‘better align the interests of companies, their shareholders, managers, stakeholders and society’. Almost a year of delay and possibly some toning down of the legislative ambition can be attributed, in large part, to the double negative opinion issued by the EU Regulatory Scrutiny Board’s (RSB) on the Impact Assessment. In doing so, the RSB – a body whose absence from public debate seems largely disproportionate to its actual powers – has shown its teeth and incidentally revealed some of the shortcomings of its own mandate. Continue reading >>
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