ecoDa: European Commission Corporate Sustainability Due Diligence proposal risks being counterproductive

The European Confederation of Directors Associations (ecoDa), which represents the interests of approximately 55,000 board members within the EU, has published a position paper on the European Commission’s proposal for a Directive on Corporate Sustainability Due Diligence. The aim of this new Directive would be to foster sustainable and responsible corporate behavior along the entire value chain by identifying, preventing or mitigating adverse impacts of corporate activities. Non-compliance could result in fines and legal action based on damages.

According to ecoDa, the vague extension of liability and the resulting legal uncertainty could have a negative impact on the European economy, jeopardise international competitiveness and thus cost European prosperity. Instead, ecoDa proposes an approach offering according to these greater flexibility and effectiveness based on risk orientation.

Furthermore, ecoDa suggests education of board members as a game-changer providing these with necessary knowledge regarding the sustainability of value chains and thus preventing loopholes and legal uncertainties within legislation. The European Commission could shape these educational measures by providing a set of recommendations and budget lines, as already done for measures related to the mentoring of women directors.

You can find the press release here and ecoDa’s position paper on the Directive here.