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Legal Affairs Committee adopts corporate due diligence report

3 Februar 2021

Legal Affairs Committee adopts corporate due diligence report

On 27 January 2021, Members of the European Parliament (MEPs) on the European Parliament’s Committee on Legal Affairs (JURI Committee) voted 34 to 3 to adopt a milestone legislative report on corporate due diligence. The truly cross-party support marks a very positive step in the fight to improve corporate accountability across sectors, and was welcomed by civil society

Prepared by Rapporteur Lara Wolters, the report asks the European Commission’s DG Justice to propose an EU due diligence regulation that obliges companies, including financial institutions, to assess and address human rights, environmental and governance risks and impacts throughout their global value chains. It is a significant recognition that voluntary engagements by businesses have failed, and binding rules are required to protect people and the planet. 

The report also underscores the importance of corporate transparency, of clear, verifiable reporting that is comparable within sectors, and of including stakeholders such as local communities and trade unions in the due diligence process. In March, the report will be put to a vote in the European Parliament Plenary. 

Taken together with the legislative report of MEP Delara Burkhardt on imported deforestation adopted in October (FW 260), this a constructive start to EU efforts to require companies to only put products that are free from human rights violations, environmental damage and deforestation on the EU market, and to hold them liable if they do not. 

A legislative proposal about overall corporate accountability from DG Justice should be forthcoming in the second quarter of 2021. In June, DG Environment is expected to present a proposal for a regulation that will address deforestation and forest degradation in supply chains. 

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