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EU Lawmakers Back Human Rights, Environmental Checks for Big Companies

By Huw Jones | April 26, 2023
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European Union lawmakers on Tuesday backed rules requiring thousands of large companies to identify and mitigate human rights abuses like child labor or slavery, and environmental damage by suppliers.

The European Parliament’s legal affairs committee voted to approve the draft EU corporate sustainability due diligence directive (CSDDD).

The cross-party agreement means lawmakers can now open negotiations with EU states, which have already reached a position among themselves, on a final version that would likely start to be rolled out in phases from around 2030.

EU companies would have to comply if they employ more than 250 people and have a turnover of more than 40 million euros ($44 million), a bigger net than EU states want.

Non-EU companies from the United States and elsewhere with a net turnover of at least 40 million euros in the bloc would also be covered.

Tuesday’s agreement excluded small and medium sized companies from scope after opposition from center-right parties.

Lawmakers backed a legal requirement for directors of companies with over 1,000 staff to be responsible for implementing a plan for cutting carbon emissions. Member states will have to set out penalties for breaches.

EU states agreed last December on including the financial services sector as an option. Members of the European Parliament (MEPs) on Tuesday made the sector’s inclusion mandatory, though with some concessions for areas like asset management.

“It’s disappointing that MEPs have backed plans which would mean many of the biggest corporations in the EU wouldn’t have to lift a finger until 2030 – this is time we cannot afford to lose,” said Aurelie Skrobik, corporate accountability campaigner at Global Witness.

Lawmakers aim to start negotiations with EU states for a final deal by year end after a full parliament vote on Tuesday’s deal around June 1.

Financial services’ start date, and how many companies are within scope, will be key areas for negotiations with EU states, but climate lobbyists say some lawmakers could challenge parts of Tuesday’s deal during the June plenary vote.

($1 = 0.9078 euros)

(Reporting by Huw Jones; editing by Mark Potter)

Copyright 2025 Reuters. Click for restrictions.

Topics Legislation Europe Pollution

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