European Parliament: Introduction of mandatory environmental and human rights in due diligence

The European Parliament voted by a large majority for the urgent adoption of a binding new EU law that would oblige companies to conduct environmental and human rights due diligence within their value chains. Such new EU due diligence rules would oblige companies to identify, address and remedy aspects of their value chain (operations, direct or indirect business relations, investment chains) that could or do infringe on human rights (including social, trade union and labour rights), the environment (for example contributing to climate change or deforestation) and good governance (such as corruption and bribery). At the same time, the new law shall guarantee victims access to legal remedies.

According to Members of the European Parliament, this development would pave the way for effective Environmental, Social, and Governance (ESG) initiatives and would set a standard for responsible business conduct in the EU and beyond. The European Commission has already announced that it will present its legislative proposal for a European Directive on mandatory due diligence later this year. Such a directive would require EU Member States to transpose such new legislation into national law. According to the decision of the European Parliament, Companies that want to access the EU internal market, including those established outside the EU, would have to prove that they comply with environmental and human rights due diligence obligations. 

More information is available in the press release of the European Parliament.

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