Social LobbyMap analysis reveals the deep influence of corporate actors on EU sustainability legislation and highlights the tension between progressive corporate voices and conservative trade associations
The adoption of the EU’s Corporate Sustainability Due Diligence Directive was a significant milestone in governmental attempts to establish human rights and environmental obligations for companies. From its inception in 2020 to its eventual adoption in April 2024, the directive was subject to intense political negotiation and sustained private sector lobbying activity.
A new report from Social LobbyMap – an EIRIS Foundation project – reveals the companies and trade associations that attempted to weaken the legislation. The research analysed consultation responses and other forms of engagement from 88 companies and trade associations, including:
- 32 from the finance sector
- 6 from business services
- 10 from the energy and utilities sector
- 16 from the apparel sector
- 24 cross-sectoral trade associations
Sector differences
It found that the financial sector and cross-sectoral trade associations were most prominent in opposing aspects of the directive. Out of the 32 finance entities covered, only eight entities expressed overall supportive positions while 17 entities adopted not-supportive or opposing views. This opposition was led by Nasdaq, Borsa Italiana, Investor AB and the Fédération Bancaire Française.
Opposition was not unanimous, however. Entities such as Association Les Acteurs de la Finance Responsible and Principles for Responsible Investment (PRI) ranked second and third respectively in supporting the directive, closely followed by Aviva Plc, ranked 5th.
Meanwhile 19 out of 24 cross-sectoral trade associations held non-supportive positions, with five found to be particularly opposing – the Confederation of Danish Industry, Confindustria, Fédération des Entreprises de Belgique, Confederation of Finnish Industries EK, and Federation of German Industries.
Social LobbyMap also found that the scores of associations that companies are members of tend to be markedly lower than companies’ own scores. For example, Orsted signed on to a joint industry letter in February 2024, signalling its support for the CSDDD at a critical moment when many other forces were working on dismantling it. However, its trade association the Confederation of Danish Industry (DI) opposed the CSDDD throughout the process and particularly opposed the introduction of directors’ duties.
Theme 1 – Human Rights Due Diligence
This theme addresses general questions such as whether there should be a mandatory human rights due diligence legislation at all, which companies it should cover, if there should be an enforcement mechanism and whether it should attach specific duties to company directors directly.
Most entities supported the idea that companies should be legally required to conduct HRDD. In particular, the idea that there should be a mandatory human rights due diligence legislation was supported by 48 entities. The strongest support came from German apparel company Leineweber Gmbh & Co. KG and the Spanish renewable energy company Acciona Energia, followed by trade associations such as the Principles for Responsible Investment and Amfori.
Nevertheless, 12 entities opposed this notion, preferring to continue relying on voluntary measures. These 12 were companies and trade associations from the financial sector, including Borsa Italiana, Ernst & Young AB and Nasdaq, as well as cross-sectoral trade associations, such as the Confederation of Finnish Industries EK, the German Chamber of Industry and Trade (DIHK) and the Korea Business Association Europe.
Scope of the directive
While there was strong support for full coverage, regardless of sector and size, a significant number of entities also suggested a variety of caveats to this. 32 of the entities analysed were found to suggest caveats that could significantly lower the ambition of the directive, for example by excluding entire sectors or by proposing to exclude all small and medium sized companies. For example, the Federation of German Industries (BDI), CPME, Confindustria, and Mirova.
The question of scope was also part of the final push to water down the directive in January and February 2024. This was led predominantly by the French government. Ultimately, the company size was increased to cover only companies with more than 1,000 employees and a net worldwide turnover of above EUR 450 million in the previous financial year. Before the final wave of lobbying the directive was supposed to cover companies with over 500 employees and a net turnover of EUR 150 million.
Directors’ duties
The least support was found for the indicator addressing a direct duty for directors. 25 entities opposed the introduction of this requirement, including France Invest, Business Europe, RWE, EuroCommerce, Engie, and the Confederation of German Textile and Fashion Industry.
While there has been some support for this, most notably from the French sustainable finance trade association Association Les Acteurs de la Finance Responsible and the Austrian UNIQA Insurance Group, the requirements that were originally suggested and present in all three stages of the EU Commission’s consultations (such as a directors’ duty of care, which required directors to take into account the consequences of their decisions for sustainability matters and a clear responsibility for directors to put in place and oversee the due diligence policy and process) were later removed after the trilogue negotiations. They did not become part of the CSDDD final text.
Theme 2 – Remedy
Theme two consists of six indicators, addressing the general question of a duty to provide remedy, including the requirement to exert leverage over business partners to ensure remedy is provided in the value chain; the duty to set up grievance mechanisms; the need to involve rights-holders in the remediation process; a process for judicial enforcement with liability and compensation; and the removal of barriers to remedy by allowing extra-territorial search for judicial enforcement.
This theme had the least support from companies and trade associations, with no entity providing overall support. In particular 52 entities either did not support or opposed judicial enforcement with liability and compensation, including Nasdaq, the China Chamber of Commerce to the EU and the Federation of German Industries (BDI). Meanwhile 42 did not support or opposed grievance mechanisms, such as the Finnish Commerce Federation, Sonae and Investor AB.
However, nine were supportive or strongly supportive of judicial enforcement and seven of grievance mechanisms. Particularly strong was support from Acciona Energia, Mouvement Impact France, Fair Wear Foundation and Association Les Acteurs de la Finance Responsible. Notably, despite the strong lobbying against these two issues, both were included in the final adopted text of the CSDDD.
Theme 3 – Value Chain coverage
The indicators in theme 3 cover the scope of value chain covered by the HRDD duty, the requirement to assess and take additional action where risks to human rights are most severe, and the requirement to introduce contractual cascading of human rights obligations.
80 entities commented on at least one indicator of this theme, making it the second most lobbied after theme one. In particular the financial sector argued that human rights due diligence should not be expected for their downstream lending activities. This argument was made by financial institutions including the Fédération Bancaire Française, Assonime and Borsa Italiana. This view prevailed and financial sector downstream activities were excluded from the scope.
Lessons for the Omnibus reforms
Ultimately the efforts of those who attempted to stop the adoption of the directive fell short. Support for the initiative ultimately prevailed but lobbying of these issues continues, in particular under the current Ominbus proposal.
Elissandra da Costa, Director of Social LobbyMap, said:
“The Social LobbyMap results show a wide and diverse spectrum of interests and influence. While some large institutions pushed to weaken the directive, others, including progressive companies and associations, advocated for stronger protections. This diversity in lobbying, and varying capacities to influence by different actors is important context in the current Omnibus debate: particularly when decisions are being made quickly, and likely to be influenced by selected groups within the spectrum with reduced potential for external scrutiny and debate. As the EU moves forward with the Omnibus reforms, it’s essential that all perspectives are heard—not just the loudest or most powerful.”
Read the full report: Corporate-Influence-on-the-CSDDD-Final-report.pdf
About Social LobbyMap
The EIRIS Foundation’s Social LobbyMap (SLM) aims to increase transparency and analysis of corporate lobbying on legislation introducing mandatory human rights due diligence and core labour rights legislation. By doing so, it seeks to encourage political engagement that supports human rights policies and enable investors, civil society, and others to hold the business sector accountable where it is trying to weaken or undermine human rights legislation.
The Social LobbyMap closely follows Influence Map’s approach and rationale for looking at government policy, which identifies and publicises how companies and their trade associations are lobbying governments on climate-related policy proposals.
For more information please visit www.sociallobbymap.org
About The EIRIS Foundation
The EIRIS Foundation is a research, advice and advocacy charity working to pioneer the next steps in sustainable finance. The Foundation has over 40 years’ experience of providing free and objective information on responsible and sustainable investment and corporate activity to other charities and the public.
Its mission is to use research, analysis and influence to identify gaps, barriers, opportunities and enablers so that we can help organisations and individuals maximise their contribution to the responsible business and investment agenda.
For more information please visit: www.eirisfoundation.org
