New Corporate Responsibility Directive Aims to Combat Environmental and Social Issues: Final Approval in Sight

The European Parliament recently approved the Corporate Responsibility Directive, which requires companies to adhere to a duty of care in their value chains. This directive aims to address issues such as child labor, labor exploitation, biodiversity loss, and environmental pollution.

The directive was passed with 374 votes in favor, 235 against, and 19 abstentions. Green MEP Heidi Hautala expressed optimism about the outcome after working on the directive for a long time. The Finnish government had pushed back against a clause on class action lawsuits included in the directive, but this was ultimately resolved to Finland’s satisfaction.

Under the directive, companies with at least one thousand employees and a turnover of at least EUR 450 million are required to comply with the duty of care. Despite some delays, the core legislation of the directive remained unchanged. In March, Belgium managed to secure the necessary majority of member states to support the directive after several attempts. The directive still awaits final approval from the Council of Member States before coming into effect.