Regulation: European Council Declines to Mandate that Director Care Obligations Require Consideration of Sustainability Matters

December 9, 2022

In February 2022, the European Commission adopted a proposal for a Corporate Sustainability Due Diligence Directive to “foster sustainable and responsible corporate behavior throughout global value chains.”  On December 1, the European Council adopted a General Approach regarding the Directive that modified the prior draft in certain respects.  In their current form, the rules would require in “scope” companies to undertake due diligence across aspects of their “chain of activities” in order to identify adverse climate and social impacts and implement mitigation efforts.  The EC chose “chain of activities” over the original “value chain” language in order to “reflect divergent views of Member States on the issue of whether to cover the whole ‘value chain’ or limit the scope to the ‘supply chain.’” 

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