The Belgian Presidency has decided to postpone the Corporate Sustainability Due Diligence Directive (CSDDD) vote in the Council of the EU today (9 February), following Germany’s announcement of abstention and the need for further discussions among EU Member States.
As recently as Wednesday, the Institutional Investors Group on Climate Change, the Principles for Responsible Investment and the European Sustainable Investment Forum urged EU member states to maintain their commitment to CSDDD.
The agreement, they said, was “proportionate and workable” in practice for companies in scope, providing them with a clear and consistent sustainability due diligence framework across the EU that supports risk management and the long-term viability of the company. They also stated that CSDDD “will play a critical role in the achievement of the EU Green Deal”, which is fundamentally intertwined with EU competitiveness, security, and resilience.
But discussions around the CSDDD have stalled. Support in Germany has been wavering, with finance minister, Christian Lindner, writing on X (formerly Twitter) that “it would put a massive burden on companies without secure progress for human rights and the environment” and “Germany is obviously anything but alone with its concerns”. Alongside Germany, Italy were also expected to abstain from the vote on CSDDD, which has led to the delay as the member states discuss the agreement further.
Isabella Ritter, EU policy officer at ShareAction, said the decision to postpone the vote on CSDDD was “outrageous”, and the delay “a leadership failure”, jeapordising lives and the well-being of the planet.
“It [CSDDD] is a game-changing piece of legislation with the power to uplift global human rights and environmental protection that has been stalled by member states, led by Germany. The stakes are too high, and we urge all EU Member States to move beyond self-interest, return to the table and ensure the passage of this crucial law as soon as possible,” she continued.
“Looking ahead to the next vote in the COREPER meeting, ShareAction calls on the Belgian Presidency to swiftly address and overcome this block and get the green light from EU Member States as soon as possible. The CSDDD is more than a piece of legislation; it’s about shaping the future of corporate accountability and sustainability practices in the EU and beyond.”
Kendall Reid, director of ESG at corporate intelligence company S-RM, added: “This outcome significantly impacts Europe’s human rights, environment and climate change agenda. Despite initial optimism, reports of opposition to the CSDDD from certain EU member states have materialised, casting doubt on its future.
“A critical question now looms over the trajectory of ESG regulation in the EU, especially with European Parliament elections in June. As we await further developments, it is quite evident that the road ahead to address human rights and environmental concerns may yet be a long one.”
Howver, Silke Goldberg, global head of ESG at law firm Herbert Smith Freehills, said there are “high hopes that this is nothing more than a stumbling block”.
“So much work has gone in to the development of the CSDDD, only for a brick wall to be put up where most lawmakers and politicians were expecting to see an open door.
“At face value it seems that there are concerted efforts to prevent the new directive from seeing the light of day, but it is not that simple. There are a number of countries with their own plans in place, indicating that we should be in no doubt; environmental and human rights due diligence is – and will remain – a legislative priority. After all, for the environment and for companies, the risks associated with getting this wrong will be severe.”