Aldi, IKEA and L’Oreal among firms to back EU due diligence law

Trade bodies and companies sign letter calling for European lawmakers to reach an agreement this week.

Eighteen companies have signed a letter urging European lawmakers to finalise the Corporate Sustainability Due Diligence Directive (CS3D) this week.

Co-legislators will meet for the fifth time on Wednesday to discuss the proposed law, which would force firms with significant operations in Europe to conduct environmental and social due diligence on the businesses within their supply chains.

It was slated to be the final trialogue for CS3D, but some insiders say an agreement is looking increasingly unlikely given how many key issues are yet to be resolved. Next year’s EU elections mean time is running out for the law to pass under the current Commission.   

Today, 50 companies, trade bodies, NGOs and trade unions threw their weight behind the plans, signing a statement to “urge the co-legislators to reach a political agreement in view of adopting the final version of the law”.

Among them were Dutch bank ABN AMRO, supermarket chain Aldi, cosmetics giant L’Oreal, and consumer goods company Unilever.

Trade bodies that have backed the letter include the European Cocoa Association, the European Semiconductor Industry Association and the European Brands Association (AIM).

Most companies are remaining tight-lipped about their position on the CS3D, but the proposals are well-known to have been aggressively lobbied against by business groups over the past four years.

Some observers believe that those groups are now hoping to delay it beyond the current legislative window by arguing it needs more time and thought before being signed off.

But one market participant told REP that the call for a more thorough approach isn’t a delay tactic, and that “unlike what NGOs will claim, bad quality legislation which engulfs resources, compliance costs and staff, [is] detracting from effective levers of change”.

He described CS3D as “a symbolic law with a lot of implementation and application challenges”.

The signatories of today’s letter acknowledged that “balancing the need for ambitious standards with the effectiveness and efficiency of the law is complex,” and that they “hold diverging views on certain aspects of the law” – although they did not elaborate on the points of difference.

“We are aligned in recognising the necessity of a common EU-wide legal framework, as part of a smart and coherent mix of policy and legislative measures,” they wrote.

Read more about CS3D here.