The EU would prosecute large companies for the violations of their suppliers

By: Trademagazin Date: 2023. 06. 26. 11:26

The European Parliament has adopted its negotiating position on draft legislation that would make it mandatory for large EU companies to check whether their suppliers use child labor or damage the environment. If the rule comes into force, careless companies will be hit with various sanctions.

As early as this June, negotiations with the EU member states on the draft promoting corporate sustainability, known as CSDDD (Corporate Sustainability Due Diligence Directive), can begin. The proposal applies to all large companies operating within the European Union, which employ at least 500 people and have a net worldwide sales revenue exceeding 150 million euros.

According to the CSDDD, the companies involved must identify and, if necessary, prevent the harmful effects of their activities on human rights and the environment. The due diligence obligation applies to the organizations’ subsidiaries and value chains, including their suppliers. According to the directive, large companies must also have a plan to ensure that their strategy is compatible with the goals of the Paris Agreement. In addition, the duties of company managers are also clearly defined in the process, so that they take into account human rights and environmental aspects even more in their decisions.
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