Making human rights due diligence a legal requirement for companies including systems to identify, assess, mitigate or manage human rights risks and impacts to improve that process over time and to disclose the risks and impacts, the steps taken and the results.
AFEP calls for the CSDDD to be postposed, simplified and for key provisions to be amended. While the entity does not call for the abolishment of the CSDDD, it does support significant changes and the weakening of standards under the Omnibus proposal.
"Postpone the application of CS3D to assess its impacts on the competitiveness of EU companies and amend the text ... The CS3D Directive, which was negotiated in haste on a highly complex subject, raises problems of clarity and legal certainty and places excessive demands and legal risks on companies under its scope. ... Leaving the text as it stands will, on one side, lead EU companies to withdraw from certain regions of the world and to abandon these markets to international competitors who are not subject to such obligations and who often have less ambitious climate ambitions and ESG policies, and on the other side, lead some non-EU companies to leave the EU market or restructure their financial consolidation. ... This penalises EU companies’ competitiveness, in a geopolitical context of exacerbated competition."
AFEP supports the introduction of mandatory due diligence at the EU level; expressing the benefits of harmonisation and creating a level playing field.
In response to Q2: "Yes, an EU legal framework is needed. Afep is in favour of a European legislative framework which would avoid a legislative patchwork effect in the EU and ensure coherence amongst national initiatives. ... The EU legislative framework should aim at creating a fair level playing field, in particular when defining the scope which has to cover non-EU undertakings providing goods or services in the EU ... The topics covered by the EU legislative framework should be clearly circumscribed to human rights risks, including social issues, and environmental local risks directly caused by activities on their surrounding environment, without making any reference to systemic global issues such as climate change or global biodiversity loss."
This joint statement signed by the CEOs of TotalEnergies SE and Siemens AG calls for the abolition of the CSDDD on behalf of the entities attending the 2025 Evian conference which includes this entity. There is no evidence of the entity stating support for the statement, it is added for clarification but the assessment is not part of the organisational score for this entity.
"CEOs call for the full abolishment of CS3D as a clear and symbolic signal to European and international companies that the governments and the Commission are really engaged to restore competitiveness in Europe."
AFEP calls for the CSDDD to be postponed to allow for a competitiveness assessment and to reduce the burden placed on businesses. Through Omnibus, the entity calls for a weakening of standards across the Directive.
"Launch a comprehensive competitiveness assessment of the CS3D before its application, in consultation with businesses and their business associations, to identify and address priority areas where clarification and burden reduction should be achieved. Leaving the text as it stands would force European companies to withdraw from certain regions of the world in favour of international competitors with lower sustainability standards. The CS3D will have to be renegotiated once this assessment has been completed. In the meantime, the application of CS3D must be postponed."
Requiring Human rights due diligence of all companies, regardless of sector and size, while still reflecting their individual circumstances.
AFEP calls for the inclusion of all companies within the scope of the directive. It states that this should include all sectors and capture non-EU companies and SMEs, with proportionate requirements and additional support for the latter.
Q 16: "It is important to underline that responsible business conduct is expected from all undertakings, “regardless of their ownership structure” (OECD Due Diligence Guidance, p. 9), while taking into account the administrative burden. According to Principle 4 of the UN Guiding Principles on Business and Human Rights (UNGP), States “should take additional steps to protect against human rights abuses by business enterprises that are owned or controlled by the State, or that receive substantial support and services from State agencies”. The concept of “undertaking” referred to in the European directive on due diligence should thus encompass, just as in competition law, “every entity engaged in an economic activity, regardless of the legal status of the entity and the way in which it is financed” ... SMEs should be in principle included in the due diligence obligation because their larger EU business relations, subject to the due diligence obligation themselves, will have to pass on these obligations to their suppliers and sub-contractors, whatever their size, in order to exercise their own due diligence. It is therefore important to include SME in the EU framework right from the beginning although obviously the substantial and reporting requirements should be lighter to avoid too heavy an administrative burden for them. However, to help them be in line with expectations they will have to respond to, it will be necessary to put in place national helpdesks and other appropriate toolboxes." Q 15: "French companies agree that the due diligence obligation should be cross-sectoral and based on key process requirements." Q 17b: "...non-EU companies operating in the EU should have precisely the same obligations as EU companies. Otherwise, the fair level playing field would not be achieved."
Implementing an enforcement mechanism where companies fail to carry out due diligence as described.
It is unclear whether AFEP supports an enforcement mechanism for companies that fail to carry out due diligence. The entity proposes the introduction of an independent third-party responsible for verifying companies' disclosures of their due diligence; however, it states that this party should not have powers beyond verification. Further, AFEP states that "if" an enforcement mechanism were to be introduced, it should be left to the discretion of Member States how to operationalise it. Overall, the entity supports and calls for the verification of statements, but does not explicitly call for or oppose an enforcement mechanism.
In response to Q2: "The supervision system put in place should be efficient and avoid administrative burden. " Q19a: "From a practical point of view, as the legislative framework is likely to cover a large number of undertakings, it is difficult to see how national authorities, even the most staffed ones, may supervise, in an effective way, all companies subject to the due diligence requirements. As an alternative, we advocate for the possibility to designate an independent third party explicitly accredited for verifying due diligence information published by undertakings. Its powers should be limited to such verifications and it should not act as a quasi-court. ... If an enforcement mechanism were to be introduced to accompany the due diligence duty, it should be left to Member States to define it and associated penalties. ... In addition, due diligence requirements should not be results-based but process-based. Companies should indeed not face liability for damage if they have put reasonable due diligence measures in place. Any enforcement mechanism should therefore expressly include a defence to liability in that sense."
Require companies to provide remedy for human rights impacts they have caused or contributed to.
AFEP states that remedy should be accessible through grievance mechanisms and through voluntary company actions; however, they do not take a position on whether this should be explicitly required under the CSDDD.
Q19a: "Access to remedy should be primarily provided locally, near the operations, through accessible and efficient grievance mechanisms. Foreign nationals should not be able to bring claims against companies before European courts in relation to acts which occurred abroad. Jurisdiction rules should remain unchanged in this respect." Q2: "Extra-judicial remedies, proactive/voluntary solutions and grievance mechanisms can play an effective role and should be prioritised."
Require companies to provide grievance mechanisms for all stakeholders including those in the value chain.
AFEP emphasises the importance of grievance mechanisms for stakeholder engagement, and sets out the benefits of having operational grievance mechanisms that align with the UNGPs. However, the entity states that this is "best practice" and should remain up to the discretion of the company, rather than being made a legal a requirement.
Q20c: "It is up to the company to decide which mechanism is suitable for the stakeholders with whom it engages. As best practice, we would like to highlight two useful tools:
• Operational grievance mechanisms at company level which are an important and efficient means to detect negative impacts at an early stage. They should be established according to the effectiveness criteria set out in Principle 31 of UNGP and should provide for anonymous complaints. Reporting obligations in relation to grievance mechanisms could cover information on overall categories of concerns raised e.g. discrimination, safety issues etc. while avoiding disclosure of information related to individual complaints which has to be kept confidential in order to safeguard confidentiality for victims.
• The OECD National Contact Points (NCP) who offer a unique State-based non-judicial grievance mechanism which help resolve issues that can arise if the OECD Guidelines are not observed. NCPs are often more efficient than lengthy judicial procedures. They contribute to improving access to remedy for victims of business-related rights violations, especially in cross-border transactions where judicial systems may fail."
Enabling judicial enforcement with liability and compensation in case of harm caused by not fulfilling the due diligence obligations.
It is unclear whether AFEP supports or opposes the inclusion of civil liability in the proposed EU due diligence directive. The entity discusses what civil liability should include and what protections there should be in place for companies to have a defence. However, the company only focuses on what the framework for civil liability should be and does not explicitly express whether it supports the inclusion of judicial enforcement. Further, it argues that victims that experience harms outside of Europe should not be able to bring claims against companies in European courts.
In response to Q 19a: "...due diligence requirements should not be results-based but process-based. Companies should indeed not face liability for damage if they have put reasonable due diligence measures in place. Any enforcement mechanism should therefore expressly include a defence to liability in that sense. Civil liability should be based on usual civil law principles, requiring a damage, a failure to put in place reasonable due diligence measures, and a causal link between the two. Criminal sanctions would be disproportionate and should not be imposed as a result of a failure to adopt and implement due diligence processes. ... Access to remedy should be primarily provided locally, near the operations, through accessible and efficient grievance mechanisms. Foreign nationals should not be able to bring claims against companies before European courts in relation to acts which occurred abroad. Jurisdiction rules should remain unchanged in this respect."
Enable and support effective remedy by allowing victims of the actions of subsidiaries outside the parent company’s home country to sue the parent company if victims are not able to find remedy in their own country.
AFEP is opposed to allowing victims from outside of the company's home country to bring claims to European courts in order to access remedy.
In response to Q 19a: "Access to remedy should be primarily provided locally, near the operations, through accessible and efficient grievance mechanisms. Foreign nationals should not be able to bring claims against companies before European courts in relation to acts which occurred abroad. Jurisdiction rules should remain unchanged in this respect.
Require companies to implement a due diligence process covering their value chain to identify, prevent, mitigate and remediate human rights impacts and improve that practice over time.
AFEP calls for a reduction in the scope of value chain coverage in relation to due diligence obligations. The entity states that the approach under the CSDDD is not feasible and that a risk-based approach is insufficient to address the legal uncertainty.
"The particularly broad definition of the chain of activities to which the obligations of vigilance must relate which leads to an infeasible and complex exercise ... the CS3D lays down that due diligence obligations must cover the upstream chain of activities and part of the downstream chain. This requirement is not feasible in practice. Companies can hardly carry out due diligence beyond one or two tiers, depending on their situation. Indeed, there are no reliable and robust tools that allow the chain of activities to be traced automatically. ... The possibility of adopting a risk-based approach and prioritising risks will not be sufficient to rationalise the considerable workload and to reduce the legal uncertainty."
AFEP calls for a limited scope of value chain coverage, limited to first-tier suppliers and contractors. It does not support upstream due diligence beyond first-tier, does not discuss downstream due diligence, and believes that obligations should be company-wide rather than based on individual local projects.
In response to Q2: "The scope of the requirements should not cover the entire value chain. It should be circumscribed to the companies’ sphere of control, ie their own operations, those of the companies they control and their first-tier suppliers and contractors. Imposing requirements beyond companies’ sphere of control would lead to a mere tick-boxing exercise where companies’ actions would focus on compliance rather than directing resources on areas where they are needed in priority (ie where the companies have identified the most salient issues)." Q14: "The definition of supply chain cannot reasonably cover all suppliers and subcontractors as this would easily amount to hundreds of thousands of players to include. Mandatory due diligence should focus on the first tier of the supply chains (direct subcontractors or providers) where co-contractors are effectively able to exercise leverage through the contractual relationship. Regarding any further obligation down the supply chain, clarity should be given as to how companies should take measures to exercise leverage as it is practically impossible for undertakings to control every single part of the entire supply chain." Q15: "Due diligence requirements should only cover the most severe risks (salient issues) to allow companies to allocate resources on those risks that require priority actions and avoid inefficient, compliance-oriented measures. Companies are best placed to identify which risks are the most severe and should be able to exercise discretion in this respect. Due diligence requirements should be company-wide, rather than country by country or project by project. The latter levels of granularity would indeed place an unreasonable administrative burden on companies."
Require that companies identify their stakeholders and their interests.
AFEP opposes the introduction of mandatory requirements related to the identification of stakeholders and their interests. While the question explicitly sets out directors' duties rather than simply a company requirement, the entity states that " a new legal obligation would not be appropriate to capture the variety of corporate contexts and relevant stakeholders".
In response to Q6, which asks "Do you consider that corporate directors should be required by law to identify the company´s stakeholders and their interests" AFEP responded, "I strongly disagree" - "First of all, we would like to highlight that stakeholder consultation is a good practice. ... However, this dialogue is not necessarily conducted at board level and is carried out on a voluntary basis. Regarding the identification of company’s stakeholders, large companies are perfectly aware that they can only grow if they take into account the ecosystem in which they operate, and which is made up of many different stakeholders.... Considering the large variety of possible stakeholders, a new legal obligation would not be appropriate to capture the variety of corporate contexts and relevant stakeholders. In particular, it would not be appropriate to impose such a requirement at board level and to expose directors to a risk of personal liability."
Require directors to establish and apply mechanisms or, where they already exist for employees for example, use existing information and consultation channels for engaging with stakeholders.
AFEP opposes the introduction of directors' duties in relation to consultation mechanisms and channels for stakeholders.
In response to Q20a, which asks "Do you believe that the EU should require directors to establish and apply mechanisms or, where they already exist for employees for example, use existing information and consultation channels for engaging with stakeholders in this area?", AFEP responded, "I strongly disagree" - "Stakeholders’ consultation is good practice and should be encouraged. A mandatory obligation would risk being overly rigid and not adapted to every corporate context. ... It is up to the company to find the best and most appropriate way of conducting stakeholder consultations (centralised vs. decentralised; annual vs ongoing; problem-based workshops vs. strategic consultative committees;) and to find the right balance in identifying and managing stakeholders and interests that are the most relevant for the company."
Require that human rights risks and impacts should be assessed through dialogue with stakeholder or with their legitimate representatives.
The entity states that the level of stakeholder engagement required under the CSDDD is "infeasible" and could lead to litigation by stakeholders who were not adequately consulted. AFEP cautions about the consequences of mandating stakeholder engagement and calls for a weakening of the standards under the Omnibus proposal.
"Regarding engagement with stakeholders, the particularly broad definition of stakeholders, which covers not only the company's own stakeholders but also those of all its partners throughout the value chain, makes the obligation of engagement infeasible in the light of the obligations placed on companies to: . Consult stakeholders at several stages of the due diligence process (including when deciding to terminate a business relationship) which may give rise to problems of business secrecy; . Respond to requests for additional information from the ‘stakeholders consulted’, it being specified that the company must respond ‘within a reasonable time’ and ‘in an appropriate and understandable format’ or justify in writing its refusal to respond to a request for additional information. This will lead to litigation by stakeholders who feel that they should have been consulted or that the responses given to their requests are pointless."
While AFEP acknowledges the importance of stakeholder engagement in relation to human rights risks and impacts, it does not believe that this should be made a legal requirement. The entity emphasises that it must remain to the discretion and voluntary nature of companies to decide whether and how they involve external stakeholders, in order to maintain an "essential" level of flexibility.
In response to Q2: "Corporate strategy is and must remain a prerogative of the Board of Directors. Companies should be given flexibility as to whether and how they involve external stakeholders in the diligence process." Q6: "Regarding the management of the risks and opportunities in relation to stakeholders, we recall that the first mission of the Board is to determine the strategy of the company, taking into account the risks it is confronted with and the opportunities it has identified. Integrating and reporting on risks factors are key components of corporate stewardship and have already been included in EU legislation for a long time. ... As a consequence, we consider that the framework regarding the integration of sustainability risks, impacts and opportunities is already in place and efficient. ... In any event, flexibility is essential to allow companies to manage risks and opportunities in relation of their stakeholders, based on their own operational and geographical contexts."
Require that corporate directors should manage the human rights risks for the company in relation to stakeholders and their interest including on the long run.
AFEP opposes the introduction of directors' duties in relation to the management of human rights risks and stakeholder interests.
In response to Q6, which asks "Do you consider that corporate directors should be required by law to (2) to manage the risks for the company in relation to stakeholders and their interests, including on the long run " AFEP responded, "I strongly disagree" - "Regarding the management of the risks and opportunities in relation to stakeholders, we recall that the first mission of the Board is to determine the strategy of the company, taking into account the risks it is confronted with and the opportunities it has identified. Integrating and reporting on risks factors are key components of corporate stewardship and have already been included in EU legislation for a long time. ... As a consequence, we consider that the framework regarding the integration of sustainability risks, impacts and opportunities is already in place and efficient. ... In any event, flexibility is essential to allow companies to manage risks and opportunities in relation of their stakeholders, based on their own operational and geographical contexts."
| Legislation | Position |
|---|---|
| EU CSDDD | Not Supporting |
| Omnibus | Not Supporting |
| Member | Performance band |
|---|---|
| Danone | B- |
| L'Oreal | C- |
| Eramet | D+ |
| Michelin | D |
| EDF | E+ |
| BNP Paribas | E |
| Engie | E |
| TotalEnergies SE | F |