For a just and sustainable economy

For a just and sustainable economy

European Commission lays down rules for companies to respect human rights and environment in global value chains.

In February 2022, the European Commission adopted a proposal for a Directive on corporate sustainability due diligence. The proposal aims to foster sustainable and responsible corporate behaviour throughout global value chains.

If the proposal is approved, large EU and non-EU companies operating in the EU would be required to identify and, where necessary, prevent, end, or mitigate adverse impacts of their activities on human rights, such as child labour and exploitation of workers, and on the environment, for example pollution and biodiversity loss.

For businesses these new rules would bring legal certainty and a level playing field. For consumers and investors, they will provide more transparency. The new EU rules will advance the green transition and protect human rights in Europe and beyond.

Several Members States, as France and Germany, have already introduced national legislation on mandatory corporate human rights due diligence and some companies have taken measures at their own initiative. These initiatives are based on the implementation by governments and companies of the UN Guiding Principles on business and human rights. Unanimously endorsed by the UN Human Rights Council in 2011, the Guiding Principles are a set of guidelines for States and companies to prevent, address and remedy human rights abuses committed in business operations. Yet there is need for a larger scale improvement that is difficult to achieve with voluntary action. The Commission’s proposal establishes a corporate sustainability due diligence duty to address negative human rights and environmental impacts.

More concretely, this means more effective protection of human rights included in international conventions such as UN human rights treaties and ILO conventions: for example, workers must have access to safe and healthy working conditions. Similarly, this proposal would help avoiding adverse environmental impacts contrary to key environmental conventions.

National administrative authorities appointed by Member States would be responsible for supervising these new rules and may impose fines in case of non-compliance. In addition, victims would have the ability to take legal action for damages that could have been avoided with appropriate due diligence measures.

The aim of the proposal is to ensure that the Union, including both the private and public sectors, acts on the international scene in full respect of its international commitments in terms of protecting human rights and fostering sustainable development, as well as international trade rules.

If you want to read the entire proposal, click HERE to read the English version.

Furthermore, as part of its “Just and sustainable economy package”, the Commission also has presented a Communication on Decent Work Worldwide. It sets out the internal and external policies the EU uses to implement decent work worldwide, putting this objective at the heart of an inclusive, sustainable, and resilient recovery from the pandemic.

We can also find these important concepts in the Holy Father’s recent speech given during the Audience to the Members of the Pharmacists’ Network ‘Apoteca Natura’ on 11th November 2022, where the Holy Father observes that: ‘Today, in a globalized and interconnected world, it appears the comparison between two cultures is even more evident: the culture of consumerism and waste – as one culture as both concepts go together, the culture of consumerism and waste-, which is a form of nihilism, and then the culture of care, on the other end. We need to choose – there is no other option to move forward! Today we are not allowed to remain neutral. A choice is required, because the cry of the earth and the cry of the poor ask for responsibility. Do reply to this call. The culture of consumerism and waste is pervasive and conditions many of our daily actions, as the culture of care is also expressed in many small and big choices that everyone is called to make, according to the role one occupies. The Encyclical ‘Laudato sì’ was intended to be, for the whole Church, and for all men and women of good will, an appeal to adopt an attitude of care with awareness and decision.’

To read the whole speech, click HERE.

Next steps

The Commission’s proposal will be presented to the European Parliament and the Council for approval. Once adopted, Member States will have two years to transpose the Directive into national law and communicate the relevant texts to the Commission.

We hope that these new steps forward will finally open a breach even in the hardest hearts; in the coming days we will send you further news on the subject with the aim of spreading such important news as much as possible towards the creation of a world in which the rights of all people are respected in the same way.

We will also answer other questions: e.g., how do I know if my company or the one that someone else manages for me is complying with these international standards? Do not worry, we will explain how to carry out this check and how to adopt the right procedures to comply.

For any questions, do not hesitate and write to us at or call us on +39.338.1530687. We will be happy to clarify all your doubts and put our skills at your disposal.

Kind regards, see you soon!

Avv. Federica Loreti

Fiat Lux Legal