Trade unions and civil society organisations have been fighting for years for the introduction of binding rules that oblige companies to respect human rights and environmental protection not only in their own business operations, but also along their global value chains. The trilogue agreement on the EU supply chain law (the Corporate Sustainability Due Diligence Directive, or CSDDD for short) is a milestone.

Successful enforcement in spite of massive resistance from business lobbies'
The EU Commission presented the proposed directive in February 2022, the Council adopted its position (general approach) in December 2022 and the EU Parliament followed in June 2023. The legislative process is characterised by massive lobbying from business and industry associations that oppose the EU Supply Chain Law or want to water it down. The fact that a political agreement has been reached is therefore being celebrated as a major success by supporters of the Europe-wide "Justice Is Everybody's Business" campaign, which also was supported by AK. In future, large companies with more than 500 employees and a net turnover of more than 150 million euros will have to comply with the new rules, as will companies from third countries that generate an equal turnover in the EU.

However, the lobbying has left its mark. The final text of the directive is not yet available, but the reports from the EU Parliament and Council point to serious weaknesses. These include, in particular, the lack of a climate change duty of care and the insufficient inclusion of the financial sector. Stricter rules for risk sectors (in terms of the number of companies covered) are only mentioned by the EU Parliament.

Important step towards a fair global economy
Despite remaining loopholes, the EU Supply Chain Law is an important step towards a fairer global economy. Those affected by the negative effects of corporate activities will have the opportunity to take legal action against companies and claim compensation. In addition, state authorities will be responsible for enforcing the law. However, the EU Supply Chain Law will not only help those affected to gain access to justice, but will also have positive economic effects, both for the Global South and for Europe. This is the conclusion of a study commissioned by AK.

What are the next steps?
The EU Parliament, led by rapporteur Lara Wolters (S&D), the Council, coordinated by the Spanish Presidency, and the Commission have reached an agreement. However, the final text of the directive still needs to be finalised. Further technical meetings are necessary to convert the political agreement into a legal text. The Council and the EU Parliament must then confirm the final text. The EU Member States must then transpose the directive into national law. The deadline for transposition is usually two years.

Further information:
EU Parliament: Corporate due diligence rules agreed to safeguard human rights and environment
Council: Corporate sustainability due diligence: Council and Parliament strike deal to protect environment and human rights
Campaign “Justice Is Everybody’s Business”
AK and ÖGB: Finally strengthen worker’s rights in the EU Supply Chain Law! (German only)
AK Study: Expected economic effects of the EU Corporate Sustainability Due Diligence Directive (CSDDD)
A&W Blog: EU-Parlament will ambitioniertes EU-Lieferkettengesetz (EU Parliament wants ambitious EU Supply Chain Law) (German only)
AK EUROPA: Corporate Sustainability Due Diligence Directive ahead of key note in EU Parliament: victims of human rights abuse need justice
AK EUROPA: Corporate responsibility for violations of human and labour rights along supply chains
AK EUROPA: EU Supply Chain Law: Council agrees on general approach'
AK Vienna: AK at a glance: Get involved: In favour of an effective EU Supply Chain Law (German only)