The European Parliament and the Council of the European Union (EU) have signed an agreement on the Corporate Sustainability Due Diligence Directive (CSDDD). First proposed by the European Commission in 2022, this landmark law has been lauded by civil society, trade unions and consumers for its ability to tackle systemic human rights and environmental abuses in global value chains.

Introducing the mandatory human rights and environmental due diligence obligations for large companies, the law urges them to remedy the harm caused by their value chains. The law specifically applies to foreign and EU companies, their subsidiaries, and their business relationships.

The law also introduces monetary sanctions on companies failing to comply with their new obligations. It facilitates a network of competent authorities in Member States to receive complaints from rights holders. It also allows aggrieved workers to sue companies under the new civil liability regime on being subject to harm as a result of a due diligence failure. 

The final text of law will be approved by both the Council of the EU and the European Parliament over the next months. The implementation of this law will also be monitored by the Clean Clothes Campaign to ensure that garment workers’ rights remain at the top of the political agenda.