Germany wasn’t the only country that rejected the EU’s Corporate Sustainability Due Diligence Directive (CSDDD); other countries withdrew their support, too. The law makes companies liable for human rights and environmental abuses in their supply chain, and according to the Financial Times, it had already been modified to gain support from Germany and Italy.
The law includes companies with over 1,000 employees and €300 million ($327 million), up from 500 employees and €150 million in revenue in a previous iteration. Belgium proposed diluting the law and using a longer phase-in for rules requiring big companies to disclose whether their supply chains harm the environment or employ child labor. To address Italy’s objections, downstream activities such as recycling and disposal of goods were removed from the text.
Germany and Italy withdrew their support at the last minute, and the law failed on February 28.
Germany has its own version of the due diligence directive, but the liberal FDP party said it would create too much legal uncertainty and red tape for companies. Italy sided with business representative groups, stating the law would hurt small and medium enterprises.
For now, it’s a no-go.
