European Parliament Approves Corporate Responsibility Directive, Promising to Tackle Global Issues and Boost Accountability

The European Parliament recently approved the Corporate Responsibility Directive, which requires companies to adhere to a duty of care in their value chains. The directive aims to address issues such as child labor, labor exploitation, biodiversity loss, and environmental pollution.

The directive was passed with 374 votes in favor, 235 against, and 19 abstentions. Green MEP Heidi Hautala, who has been working on the directive for a long time, expressed optimism about the outcome. Together with Lara Wolters and Manon Aubryn, Hautala starred in a documentary about the development of the Corporate Responsibility Directive.

Under the directive, companies with at least one thousand employees and a turnover of at least EUR 450 million are required to comply with the duty of care. The Finnish government pushed back against the clause on class action lawsuits included in the directive, but the matter was ultimately resolved to Finland’s satisfaction.

Despite some delays, the core legislation of the directive remained unchanged. In March, Belgium, holding the EU presidency at the time, managed to secure the necessary majority of member states to support the directive after several attempts. The directive still awaits final approval from the Council of Member States before coming into effect.