EU corporate accountability landmark legislation under threat
The celebrated passage of the Corporate Sustainability Due Diligence Directive (CSDDD) last year was a landmark moment. It set an enforceable global standard requiring large companies operating in the EU to identify and address environmental harm and human rights abuses like forced labor or child labor in their supply chains. However, a recent article by Walk Free suggests that this breakthrough win on corporate accountability is under threat from US tariffs and internal EU rollbacks, both of which could weaken the vital directive.
Major step forward under threat of a backwards slide
When it was passed in 2024 the CSDDD was hailed as a huge step forward in the global efforts to hold companies accountable for modern slavery and environmental abuses in their supply chain. Markedly, the CSDDD requires businesses to conduct analysis of their supply chains from tip to tail. Leaving exploitation with nowhere to hide.
Walk Free writes:
“By requiring businesses to conduct due diligence beyond just direct suppliers, it aims to prevent abuses such as forced labor, child exploitation, and environmental destruction from being hidden deep within global supply chains.”
Now, after years of negotiation and advocacy from hundreds of organizations, including Freedom United, that progress is in peril. From aggressive threats of tariffs by the US to internal EU claims that the directive needs to be simplified, hard-won legislative headway is on the line.
Due diligence laws protect people, the environment AND businesses
Due diligence laws like the CSDDD don’t just help uncover modern slavery and protect the environment, they are good for business. Bringing clarity and consistency across the board, they help responsible companies engage in fair competition. Removing or weakening the CSDDD risks companies avoiding responsibility for harm in their supply chain. And that is bad for business.
Walk Free states:
“Weakening these protections risks reversing years of progress, exposing vulnerable workers, communities, and ecosystems to harm, and undermining the EU’s role as a global leader in sustainability.”
By ensuring a level playing field for all companies, legislation like the CSDDD helps create a system where responsible companies thrive. Importantly, it also ensures bad actors who harbor exploitative labor and environmental practices face consequences.