ABSTRACT
The first chapter of the book provides details on key provisions of the new Corporate Sustainability Due Diligence Directive (CSDDD) – including proposed amendments by the European Commission's Omnibus Directive Proposals – and also gives an overview on other important ESG-related EU law such as the Corporate Sustainability Reporting Directive (CSRD) in connection with the European Sustainability Reporting Standards (ESRS), the EU Deforestation Regulation (EUDR) and the Forced Labour Regulation as well as the Green Claims Directive (GCD). The first chapter in particular explores both the direct and indirect impact of the CSDDD on companies doing business in the EU or being part of EU-related supply chains. As the CSDDD includes a heavily disputed civil liability regime and severe administrative penalties, the chapter discusses (i) the requirements triggering such civil liability and administrative fines, (ii) potential jurisdictional issues for litigations in EU Member States and (iii) difficulties concerning the enforcement of court judgments (rendered by courts in EU Member States) and administrative penalties in countries such as China and the United States.
Further implementing the EU Green Deal, the CSDDD also requires companies within its direct scope to adopt a climate-related transition plan ensuring that their business models and strategies are in line with the climate targets of the Paris Agreement and the European Climate Law. As the transition plan must include time-bound targets in relation to Scope 1, Scope 2 and Scope 3 greenhouse gas (GHG) emissions, it is in particular explored how this will impact value chains, both upstream and downstream. In this context, the author presents a proposal for an incentive mechanism (subsidies and/or tax reductions) in connection with the contractual cascading (obligation of result) of year-on-year decarbonisation rates to achieve net-zero by 2050.
Due to the fact that the CSDDD mandates the integration of the environmental and human rights-related due diligence obligations into the companies’ business policies as well as the adoption of CSDDD-related codes of conduct covering entire supply/value chains, the chapter also examines the potential liability for corporate directors in Austria (example for a Member State of the EU), the United States and China.
