MEPs want large companies to stop harming the planet and people

09 February 2023
by WWF -- last modified 09 February 2023

Today, MEPs at the European Parliament's Committee on Environment (ENVI) took an important step toward more business accountability as they voted for making it mandatory for companies to address environmental and human rights concerns in their operations and value chains.

A significant number of EU companies ignore sustainability issues in their operations, leading to severe consequences not only for the planet but also often for their own business model. The Corporate Sustainability Due Diligence Directive (CSDDD) will help tackle this problem and provide a clear legal framework for companies to manage sustainability risks and impacts.

Sebastien Godinot, the senior economist at the WWF European Policy Office, said: "MEPs said no more free passes to large companies for being complicit in the destruction of our planet. Businesses need to be held responsible for the environmental and human rights impacts they create, both within and outside the EU, and be proactive in preventing and mitigating these risks."

WWF endorses MEPs' decision to mandate companies to have robust, time-bound climate targets and plans to accelerate their transition. Importantly, the position of ENVI incentivises companies to achieve these targets by linking directors' pay to the company's sustainability performance, a measure that WWF had advocated for. This means that CEO's bonuses would be tied to the achievement of their sustainability goals.

WWF also supports the committee's position to define a broad list of negative environmental impacts that companies must consider in their due diligence process, defined consistently with the environmental categories of the EU Taxonomy. In other words, companies will be obligated to prevent, mitigate and end - both in their own operations and value chains - environmental harm related to climate change, water and marine resources, biodiversity and ecosystems, pollution, and circular economy.

Finally, the text includes several loopholes that should be addressed in further negotiations. In fact, it allows companies to replace their obligation to conduct due diligence on climate change mitigation by setting climate targets and plans. In practice, this means that by having longer-term climate plans, companies could get out of their obligation to identify, prevent and mitigate potential or actual negative climate impacts in their everyday operations.

WWF urges the Parliament's Committee on Legal Affairs to back the ambitious aspects of the ENVI position and address the shortcomings by ensuring companies benefit from both climate due diligence and the transition plans.

WWF is an independent conservation organisation, with over 30 million supporters and a global network active in over 100 countries. WWF's mission is to stop the degradation of the Earth's natural environment and to build a future in which humans live in harmony with nature, by conserving the world's biological diversity, ensuring that the use of renewable natural resources is sustainable, and promoting the reduction of pollution and wasteful consumption.

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