ESIA

The entity is supportive of a legal requirement for human rights due diligence in general terms but is not supportive of each of the key specifics of the proposed text.

"""ESIA welcomes the European Commission’s proposal for a Directive on Corporate Sustainability Due Diligence (CS3D).""""ESIA is supportive of the introduction of a common set of binding legal requirements on mandatory human rights and environmental due diligence. However, binding legal requirements must also serve to combat growing internal market fragmentation in the area of corporate sustainability and due diligence. With the recent adoption of due diligence legislation by Member States, this fragmentation becomes increasingly unworkable. Therefore, the CS3D must ensure that there is a level playing field. Unfortunately, the current Proposal does not achieve this aim."""

While signatories show general support for CS3D objectives, they urge rapid adoption of the postponement measures in the Omnibus package. Their position centres on delaying implementation.

The statement points out that 'Although we stand behind the objectives of the CSRD and the CS3D, any setback in the adoption of the proposed postponement measure would jeopardise the stability and predictability that companies require to plan their long-term investments and compliance strategies'. It also indicates that 'reporting obligations under these laws are considerably resource intensive, often requiring additional headcount and a substantial financial investment. By swiftly postponing requirements set in the CSRD and the CS3D, policymakers can avoid squandering vital business resources'.

The entity is supportive of and EU wide legislation and are ready to implement the requirements.

"""we are aligned in recognising the necessity of a common EU wide legal framework, as part of a smart and coherent mix of policy and legislative measures. We therefore urge the co-legislators to reach a political agreement in view of adopting the final version of the law.""""The CS3D should mark the beginning of delivering better outcomes for people and the planet at scale, and in doing so be a key component of a common and future-fit European framework for a resilient economy. Businesses, industry associations, trade unions and civil society organisations look forward to the final outcome of the negotiations. We stand ready to implement the requirements and will remain engaged in policy discussions on mandatory sustainability due diligence in the years to come."""

By endorsing this joint statement, the entity demonstrates support for the Omnibus Simplification Package designed to lower the level of ambition of the Corporate Sustainability Due Diligence Directive.

"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. ... 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"

The joint statement shows support for the legal framework on due diligence irrespective of diverging views on certain aspects.

The joint statement indicates that 'While we hold diverging views on certain aspects of the law, we are aligned in recognising the necessity of a common EU wide legal framework, as part of a smart and coherent mix of policy and legislative measures. We therefore urge the co-legislators to reach a political agreement in view of adopting the final version of the law ... We commend the co-legislators’ efforts in current negotiations toensure that the CS3D follows a risk-based approach and builds on existing globally recognised due diligence standards, such as the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises ... Key elements of this risk-based approach include the recognition of different modes of involvement with adverse impacts and allowing companies to prioritise the most severe and likely ones'.

The entity is in favour of a regulatory approach towards due diligence.

"""Re: Companies call for a level playing field on due diligence...... Our associations remain supportive of the proposed directive on corporate sustainability due diligence. However, we call strongly for maximum harmonisation provisions to be introduced into the legal framework so as to ensure a level playing field and avoid further internal market fragmentation. Divergent national legal regimes on due diligence would not only be costly and burdensome for companies of all sizes but, more importantly, risk undermining the achievement of the goals of the legislation in an efficient and effective manner."""

The entity calls for full harmonisation

The entity states that 'The most important element of the proposal should be full harmonisation. This is necessary to avoid fragmentation of the EU single market and ensure a level playing field. This can be achieved by using, for instance, an “internal market clause”. If the EU wishes its model to be used as a reference elsewhere in the world, it cannot rely on the limited harmonisation provided by the directive that would potentially lead to 27 different frameworks'.

The entity is in favour of a regulatory approach towards due diligence.

"""As industry associations / responsible business initiatives, we stand behind the EU’s objective to ensure respect for human rights and the environment through an EU-harmonised regulatory approach to due diligence""""We call for: Full harmonisation and consistency of EU due diligence requirements in sectoral and cross-sectoral policies and legal frameworks, in terms of scope, standards and enforcement modalities to ensure respect of better regulation principles."""

The entity, through a joint business statement (JBS), shows support while showing some concerns on implementation.

The JBS indicates that: 'European business remains supportive of the objectives of the proposed directive ... and we urge co-legislators to work on a reasonable approach that is manageable for companies in practice'. It also states that 'we strongly call for full harmonization to ensure a level playing field and avoid further internal market fragmentation' and that 'legal clarity is paramount for the success of this initiative'.

The JBS does not oppose the inclusion of SMEs, but calls for safeguards to protect them.

The JBS seem to show support to the inclusion of SMEs, although it reiterates that: "The European economy, included SMEs which will be impacted even if formally out of the scope, need a workable due diligence framework that is drafted in a balanced and proportionate way."

The entity supports the need for effective enforcement.

"The Directive aims to harmonise requirements for companies to carry out due diligence in their own operations, subsidiaries and value chains, thereby ensuring an EU-wide level playing field and avoiding market fragmentation. This common standard should be effectively enforced, recognising the need for a balanced combination of administrative enforcement and civil liability, as well as access to justice measures."

The joint statement shows support both for administrative enforcement and civil liability

The joint statement indicates that 'This common standard should be effectively enforced, recognising the need for a balanced combination of administrative enforcement and civil liability, as well as access to justice measures'.

Entity supports the proposal in general terms

"We call for: ""Full harmonisation and consistency of EU due diligence requirements in sectoral and crosssectoral policies and legal frameworks, in terms of scope, standards and enforcement modalities to ensure respect of better regulation principles.""""The European Commission to facilitate engagement between enforcement agencies at Member State level by (for example) establishing an EU-level expert group, to ensure coherent national enforcement."""

The entity does not consider necessary to regulate directors' duties.

The entity states that 'Regulating directors’ duties is unnecessary to reach the objectives of the proposal and does not belong in a due diligence framework. It will have negative side-effects, e.g. interfering with national company law systems and creating legal uncertainty, without added value to the ability of companies to apply effective due diligence'.

The JBS rejects including directors' duties in the Directive.

The JBS states that: 'regulating directors' duties does not belong in a due diligence framework. It will have negative side-effects, including the disruption of existing, well-established governance models of the member states, without added value to the ability of companies to apply effective due diligence'.

Although the entity does not oppose to legal liability, it calls for a more balanced approach

The entity states that 'Legal liability provisions need to be balanced and truly incorporate the widely accepted principle that due diligence is first and foremost an obligation of means and that companies cannot be made liable for damages they have not caused or directly contributed to (intentionally or negligently)'

Although the joint statement does not oppose to legal liability, it calls for a more balanced approach

The joint statement indicates that 'Legal liability provisions, including sanctions, need to be balanced, follow legal traditions around breach-damage-causality and truly incorporate the widely accepted principle that due diligence is first and foremost an obligation of means. The complexity of value chains cannot be underestimated when analysing impacts which can have multiple competing causes, players and dynamics. Therefore, companies cannot be made liable for damages they have not -intentionally or negligently - caused'.

The entity statement is questioning what is meant by established business relationships as well as value chains and suggests limiting both.

"""The value chain is an extremely vague concept which results in decreased legal certainty for companies. The OECD Guidelines for Multinational Enterprises refer to ‘supply chain’ as do the German Supply Chain Act and the proposed French AGEC Law. Referring to value chains instead of supply chains leads to even further internal market fragmentation of companies’ due diligence obligations. Moreover, ‘value chain’ could be interpreted as including the end use of products which is extremely difficult to control and detracts from the identification and mitigation of salient risks in supply chains.""""Established business relationships. This concept needs to be better defined but the definition must be consistent with the cause-contribute framework outlined in the UNGPs and not extend the scope beyond that framework. ESIA deems that only direct contractual business relationships within the supply chain at a level at which companies are directly connected should be covered by the CS3D. In other words, the Directive should focus on those contractual relationships that cause or contribute to an impact and an associated level of responsibility and leverage for correction and remedy."""

The statement advocates for enforcing due diligence in own operations and 'value chains'.

The statements shows support for the Directive in general, and also states that: 'The Directive aims to harmonise requirements for companies to carry out due diligence in their own operations, subsidiaries and value chains, thereby ensuring an EU-wide level playing field and avoiding market fragmentation. This common standard should be effectively enforced, recognising the need for a balanced combination of administrative enforcement and civil liability, as well as access to justice measures'.

The entity considers that covering the whole value chain is neither manageable nor realistic. It also calls for a reduction of obligations.

The entity states that 'Focusing on all aspects within the whole value chain is neither manageable nor realistic. Supply chains alone can comprise multiple tiers with hundreds or thousands of locations, product lines and entities. Companies should be able to prioritise the most salient risks and have the freedom to take appropriate actions to cease, prevent or mitigate identified adverse impacts in accordance with a risk based approach. Without this ability to prioritise, companies cannot realistically implement due diligence requirements in an efficient way'. It also points out that ' The list of norms/conventions in the Annex is too far reaching and generates legal uncertainty. Most of the norms in the annex are only applicable to states and not legal private entities like companies. To be workable, this list should be reviewed and shortened, clearly indicating what are the requirements directly applicable to companies'.

The joint statement argues that companies can't focus in all elements of their value chains. It also calls for a reduction of obligations

The joint statement states that 'To ensure that the future Directive is truly consistent with a risk-based approach, widely supported in international instruments in the UN and OECD, companies cannot be expected to focus on every single element of their value chains. The ability to prioritise the identification of and action to address the most salient risks is a necessity that must have a crucial impact on compliance with the due diligence process and its consequences'. It also points out that 'we call for revisiting and shortening the annex to only include those conventions and treaties that create concrete obligations on companies so not to mix up their roles with the one of states'.

The entity emphasises the importance of stakeholder engagement for effective due diligence.

"It is important that the Directive integrates stakeholder engagement as a critical component of effective due diligence, recognises the role of trade unions and worker representatives, and promotes effective collaboration between companies, including in the context of industry and multistakeholder initiatives."

There's a support for stakeholder engagement throughout due diligence.

The joint statement indicates that: 'It is important that the Directive integrates stakeholder engagement as a critical component of effective due diligence, recognises the role of trade unions and worker representatives, and promotes effective collaboration between companies, including in the context of industry and multistakeholder initiatives'.

The entity emphasises the importance of stakeholder engagement for effective due diligence.

"It is important that the Directive integrates stakeholder engagement as a critical component of effective due diligence, recognises the role of trade unions and worker representatives, and promotes effective collaboration between companies, including in the context of industry and multistakeholder initiatives."

There's a support for stakeholder engagement throughout due diligence.

The joint statement indicates that: 'It is important that the Directive integrates stakeholder engagement as a critical component of effective due diligence, recognises the role of trade unions and worker representatives, and promotes effective collaboration between companies, including in the context of industry and multistakeholder initiatives'.