ABSTRACT
This paper contextualises the origins of the due diligence process embedded in the Corporate Sustainability Due Diligence Directive and assesses how these origins are reflected in the notions of ‘adverse impact’ and its ‘severity’, ‘risk’, ‘influence’ and ‘leverage’. In analysing the new provisions, the paper highlights a number of interpretive problems and outstanding issues relating to the identification of the violations covered by the instrument, the appropriate prioritisation of managed risk, the ways in which companies might influence their business partners, the fulfilment of due diligence obligations at group level, and the enforcement mechanisms. These issues will need to be addressed by the European Commission in its guidelines or at the domestic level by the national legislators. Therefore, the final adoption of the Directive, which marks the end of a challenging legislative process, should only be seen as a regulatory starting point for future developments, as there are many unresolved problems that require supplementation, clarification, and interpretation.
Corgatelli, Michele, The Corporate Sustainability Due Diligence Directive: Outstanding Issues (July 5, 2024).
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