Amfori

"We remain certain that the adopted directive on Corporate Sustainability Due Diligence (CSDDD) will bring scale to current due diligence efforts and support the practical implementation of international standards (such as the OECD Guidelines, the UNGPs, and ILO Conventions). we reiterate our full support for pragmatic implementation of the EU sustainability due diligence framework which will level the playing field across global supply chains. Legal certainty is essential, not only for businesses to operate effectively within the EU market but also for our global trading partners to engage with EU businesses. We therefore call on the Commission to ensure that its “bolder, simpler, faster” mission does not result in weakening the CSRD and CSDDD text regarding sustainability due diligence."

"The EU CSDDD was designed to translate decade-long voluntary standards on responsible business conduct into a mandatory framework. Maintaining alignment with those very standards remains crucial for businesses."

Signatories ‘are issuing this joint statement to emphasise the importance of preserving the core of the EU sustainable finance framework. Rules on (…) corporate due diligence are a key foundation for achieving the EU’s economic and sustainability goals. (…) In the context of the Omnibus I simplification initiative, we call attention to the investors, banks, other financial institutions and companies across our economy that support preserving the core elements of the (…) Corporate Sustainability Due Diligence Directive (CSDDD). (…) CSRD/ESRS and CSDDD are essential for achieving the EU’s wider sustainability, growth and competitiveness ambitions. (…) The signatories of this statement consider that regulatory simplification can be achieved without compromising on the substance of sustainability rules or their significant benefits for businesses across the EU’.

The statement indicates “We have been supportive of the idea of an EU-wide framework for responsible business conduct since the very start...”“We therefore call on EU policymakers to endorse the political agreement...”

The letter states that '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'. Specifcally, 'we urge the European Parliament and Member States to adopt maximum harmonisation provisions such as those previously applied to consumer law. At a minimum such provisions should be applied to the scope (Art.2), definitions (Art.3), due diligence process (Arts. 4-8), communication (Art. 11), guidelines (Art.13), sanctions (Art. 20) and civil liability (Art. 22)'.

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'.

"""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."""

It states that: 'While we applaud the EU Commission’s level of ambition, we believe the proposal in its current form falls short of its policy objectives and needs further strengthening, in terms of enhanced harmonisation, greater legal certainty, full level playing field and stronger alignment with international standards. In this paper we offer a set of recommendations to improve the proposal (…)' It goes on to say that: ‘we urge the EU institutions to works towards achieving full harmonisation’. Finally, it also indicates that ‘Due diligence is intended to be ongoing. When gaps or shortcomings are identified, companies are expected to have processes in place to manage them and provide for remedy where appropriate. Legislation should encourage companies to disclose the steps they are taking to manage risks and, if applicable, remediate adverse impacts that might have occurred’.

In response to question 2, the entity considers thata an EU legal framework is needed, as it could help to level the playing field, maximise the efforts of all those involved, streamline approaches, etc. It also sates that 'due diligence is intended to be an ongoing, proactive process driven by continuous improvement'. It advocates for combining elements of different approaches, including cross-sectorial princples-based approach togeteher with minimum process and definitions approach. In addition, it advocates for a Regulation instead of Directive: 'A Directive risks undermining the primary objective of harmonisation since it would need to be embodied into national legislation. A Regulation, on the contrary, could ensure there is no differentiated approach at national level'.

"""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 statement, demonstrates clear and direct support for the creation of mandatory legislation on human rights and environmental due diligence, recognizing the importance of standardizing business conduct. The statement actively supports the creation of a binding directive on due diligence, advocating for it as essential to establishing a uniform and competitive standard.

The entity states that: ‘International standards leave no doubt: due diligence is a business responsibility regardless of company size or position in the supply chain. (…) expectations need to be reasonable and commensurate to the capacity, resources and leverage of a given business. Proportionality therefore becomes key alongside flexibility. We still believe the ultimate ambition of the EU law should be that operating in the EU internal market is conditional upon conducting due diligence, regardless of sector, size and supply chain. This could be achieved by means of a progressive expansion of the scope of the Directive for instance, and by factoring in clear time-bound transitional periods for that expansion. Both proportionality and flexibility should be applied so that the due diligence duty does not become too heavy a burden, especially for smaller players who might lack resources, knowledge or time to take up those practices’.

In response to question 15, the entity states that 'To bring scattered efforts to scale, to create a level playing field and to generate more leeway along supply chains, a horizontal, cross-sectoral diligence duty based on key process requirements appears to be the right approach’. Question 16 asks how the burden can be reduced for smaller companies, including the option of excluding them from the legislation. The entity does not select any of the proposed exclusions, and instead advocates for providing guidance and support to SMEs

The letter explicitly advocates that all companies, regardless of sector or size, should be subject to the legislation, reinforcing the idea of a "level playing field." The statement supports the universal application of the regulation, without sectoral or business-size exceptions, fully meeting the indicator.

"EU-wide mandatory due diligence legislation that is implemented in a harmonized way across the EU Member States will translate into greater efficiency, increased clarity of expectations and greater legal certainty for businesses. The harmonisation should encompass not just the due diligence standard but also the enforcement mechanism attached to it. We see a risk that the current proposal will create a fragmented litigation landscape and legal uncertainty compared to the adopted version."

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'.

The entity advocates for supervision by national authorities based on complaints (and/or reporting) about non-compliance with setting up and implementing due diligence measures, etc. with effective sanctions (such as fines). In its response to question 19a it also adds: '‘The EU needs to design a smart mix of policy measures, including incentives such as import duties, changes in public procurement policies, taxonomy, trade and investment policies. Continuous improvement is key: the forthcoming legislation needs to encourage companies to collaborate with their suppliers and business partners. Businesses should not be regarded as non-compliant where they did all that was reasonably expected. Non-compliance should be limited to instances where there is a total lack of HRDD, false statements or gross negligence. Instances of non-compliance should be proportionate to the leverage of the company and commensurate with the adverse impact, in particular for SMEs’.

"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 statement advocates that the legislation should establish clear legal consequences for non-compliance with due diligence obligations. Implicit support for enforcement mechanisms. Although it lacks detailed specifications (such as civil or administrative sanctions), the acknowledgment of the importance of legal consequences justifies a positive score

"At first glance, this appears to offer a simpler, more manageable approach. But does it actually deliver on that promise of simplification? Or could it, in practice, require more from companies, just in a far less structured and predictable way? In other words, could this end up costing companies and their suppliers even more? A closer look suggests that the answer may be the latter. To comply, companies would need to monitor all tier 1 suppliers indiscriminately, regardless of their actual risks. They should also remain on constant alert for potential issues that could arise beyond that first tier. The vague standard of ‘plausible information’ would leave companies in a permanent state of reaction, locked in a cycle of crisis management—putting out fires instead of preventing them. This undermines any opportunity for strategic focus and efficient resource allocation. Rather than reducing administrative burden, this model risks creating more work, not less. By contrast, a genuine risk-based approach would be far more effective. It would put companies in control, allowing them to assess where the greatest risks lie and direct their efforts accordingly."

"From our experience, we know that severe risks to people and planet in global supply chains commonly lie beyond direct suppliers - in deeper tiers such as raw material extraction and manufacturing semi-finished products. Effective due diligence and risk management are a continuous process and cannot be achieved by monitoring only certain suppliers once every five years. An arbitrary limitation could expose businesses to more risks and higher costs, with detrimental impacts for workers. If businesses know their supply chain better, they will be better prepared to deal with any problem that might materialise. Effective risk management, therefore, makes business sense since it reinforces both preparedness and supply chain resilience. Moreover, by focusing only on direct suppliers, the proposal puts more ambitious companies that invest in transparency and traceability along their supply chain at a disadvantage."

It states that 'the most salient ... risks and impacts often lie deeper in supply chains. A risk-based approach to due diligence is helpful to companies as this allows them to focus on where the real risks are, building on their knowledge of their own supply chains. By limiting due diligence to tier 1 suppliers, the Omnibus proposal may unintentionally promote the kind of “box ticking” compliance exercises that it intends to reduce'.

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 states that: ‘In the spirit of international norms, due diligence requires companies to engage to understand how they relate to potential or actual risks and to take ownership by managing risks and impacts to which they might be connected. For due diligence to effect positive impact on the ground, it should ideally result in every actor along the supply chain taking its share of responsibility and owning its due diligence. Due diligence would therefore become a real supply chain endeavour’. It also points out that: ‘Due diligence is intended to be ongoing. When gaps or shortcomings are identified, companies are expected to have processes in place to manage them and provide for remedy where appropriate. Legislation should encourage companies to disclose the steps they are taking to manage risks and, if applicable, remediate adverse impacts that might have occurred. This would mean recognising that due diligence is not about perfection but rather about engaging and aiming at continuous improvement’.

The entity considers that an EU legal framework on due diligence is needed (question 2). In relation to due diligence duty definition (question 14), it states that 'Both the notions of “business relationship” and that of “reasonable efforts” are not clearly defined. Therefore, we anticipate that the lack of clarity will lead to differing interpretations and potentially to confusion as to what it is expected of businesses. Any definitions of due diligence duty should be anchored to international normative frameworks like the UNGPs and the OECD Guidelines for Multinational Enterprises. Due diligence is intended to be an ongoing, proactive process driven by continuous improvement. It is conducted in a way that is proportionate to the company’s size and leverage in the supply chain. It helps companies understand and progressively increase the knowledge of their supply chains. Its primary objective is preventative in nature, though due diligence is also about identifying, mitigating, accounting for and eventually remediating adverse impacts when appropriate (…) As part of their due diligence efforts, companies should be allowed to prioritise risks in their supply chains on the basis of their leverage, degree of involvement with the adverse impact, severity and likelihood of the risk materialising. (…) A company's actions, subsequent responsibility and annexed accountability should be nuanced depending on its degree of “involvement” with the negative impact, i.e. whether a company caused, contributed to or was directly linked to an adverse impact. This approach should be aligned with the UNGPs'. Finally, it advocates for a combination of principles-based and minimum requirements approach, applied across sectors.