The European Commission has approved the Corporate Sustainability Due Diligence Directive.

The directive creates a corporate due diligence standard on sustainability for businesses operating in the EU. However, it is less robust than the initial proposal and needs to be approved by the European Parliament.

The initial proposal was for the directive to include companies with 500 employees and a turnover of €150 million. Those numbers have been increased to 1,000 employees and a turnover of €450 million.

Commenting on the outcome, Isabella Ritter, EU Policy Officer at ShareAction, said, “Today’s vote marks a watershed moment for corporate accountability, ushering in a new era where businesses will be required to take action against labour abuses and environmental pollution.

“Yet the last-minute changes made to appease some member states have substantially reduced the scope of what the CSDDD could have achieved. Slashing by more than half the number of affected companies that the legislation will apply to severely undermines its original intentions, failing both people and planet. Additionally, by phasing in the limited measures agreed upon today, we are unlikely to see tangible results for almost a decade, leaving vulnerable workers at risk and jeopardising our planet and its vital ecosystem.

“In introducing these changes in the final weeks of negotiations, EU leaders clearly prioritised political gamesmanship over the interests of business, civil society and consumers.”

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