Mathilde Flamant and Jean-François Pons, avec l’aimable autorisation de Eurofi


On 23rd February 2022, the European Commission presented a new phase of its initiative on sustainable 
corporate governance with the proposal for a Corporate  Sustainability Due Diligence Directive (CSDD). The proposal was introduced by Commissioner for Justice Didier  Reynders as ‘a real game-changer in the way companies  operate their business activities throughout their global  supply chain.’ 
The proposed rules aim at advancing the green transition  and at better protecting human rights in Europe and 
beyond by establishing a corporate sustainability due  diligence duty on the companies over a certain threshold. 
If such a proposal is accepted by the co-legislators, it would represent a significant step forward in using corporate law to fight climate change and human rights violations,  given its binding nature, its extraterritorial scope and the economic significance of activities covered through the value chains. There have been already concerns expressed by the corporate sector about the absence of clarity in some of these rules and the risk of a heavy burden on the companies concerned and even indirectly on SMEs. At this stage, the proposal demonstrates shortcomings in terms of legal clarity and coherence with other EU and international rules and seems to fall short of achieving harmonization in the EU. The balance found by the EC will certainly impact the financial sector, despite many exceptions accorded to it.