Press release / Feb. 24, 2020

European Commission study on due diligence in supply chains must be followed by binding legislation

Monday 24 February –The European Commission study on due diligence requirements through the supply chains must be followed by binding legislation to ensure that companies, including finance, are held accountable for their impacts on people and the planet.

The study sought to draw on the views of both civil society and businesses to assess the existing regulation and proposals for supply chain due diligence in the area of human rights, environment and governance.  

The release of the findings of this study comes shortly after the recent launch of the EU’s new flagship climate proposal, the European Green Deal which sets the ambition to make the EU climate neutral by 2030.

The most striking conclusions of this research highlight that:

  • The majority of stakeholders responded that the current regimes of voluntary measures have failed to significantly change the way businesses manage their social, environmental and governance impacts, and provide remedy to victims.

  • Only 1/3 of business respondents stated that they currently undertake some form of due diligence which takes into account all human rights and environmental impacts. In their response, civil society is united in its call for mandatory and enforceable EU due diligence rules, while a majority of businesses are recognising the value of enforceable EU rules.
  • A majority of stakeholders favour a cross-sectoral approach for an EU law, which will ensure effective harmonisation, legal certainty, a level playing field, and allow for a non-negotiable standard for business relationships throughout the supply chain.

While the study does not explicitly recommend policy options for the Commission to follow, there is a clear conclusion that the current regulatory measures are not delivering on corporate accountability.

Global Witness has demonstrated how European companies and investors have been complicit in land grabbing, deforestation, human rights violations and forcing millions into poverty and instability. If the EU is truly committed to become climate neutral by 2030, its investments and value chains should not profit from human rights abuses, corruption and environmental destruction.

Our latest briefing clearly outlines the need for regulatory action and why the EU is uniquely placed to introduce a set of harmonised due diligence rules across all its member states. 

Richard Gardiner, Campaigner at Global Witness, said:

“The release of this study provides the European Commission with justification and support to bring forth legislation to ensure that companies, including financial institutions, carry out responsible business conduct due diligence to guarantee that their activities are not harming people and the planet. 

Both civil society and companies want the EU to act. As time runs out for the EU to deliver on its environmental commitments, the Commission is being called by a broad range of stakeholders to show global leadership. To do this, the EU must now introduce a legislative proposal on corporate due diligence.”

Human rights and environmental due diligence is a concept familiar to companies. These companies, including finance, are increasingly taking steps to meet their responsibility and working to prevent their activities from harming people and the planet. It’s time for the EU to act and introduce binding rules requiring companies to ensure their supply chains are not linked to environmental and human rights abuses.

/ ENDS

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