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Corporate Sustainability Due Diligence Directive

On February 23, 2022, the European Commission introduced the proposal of a Corporate Sustainability Due Diligence Directive (“CSDDD”) as part of their ongoing efforts to fight climate change and protect human rights.

The proposal has been approved by the European Parliament on June 1, 2023, and is currently undergoing the approval process. In the framework of the European Green Deal (that aims to reduce greenhouse gas emissions by at least 55% by 2030 and reach zero climate impact by 2050) the proposal of CSDDD will require companies to adhere to the EU's new sustainable policies in areas such as climate, energy, transport, and taxation. Other initiatives under the European Green Deal include the Corporate Sustainability Reporting Directive, the EU Regulation 2020/852 on taxonomy, the EU Regulation 2019/2988 Sustainable Finance Disclosure Regulation, as well as the Carbon Border Adjustment Mechanism and the Green Claims Directive.

While the proposed CSDDD is still subject to negotiations during the EU negotiation process, it is expected to be fully approved by 2024. Once approved, the directive will be subject to transposition by EU Member States.

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Corporate Sustainability Due Diligence Directive