EU Climate Change Due Diligence in the Corporate Sustainability Due Diligence proposal
The Corporate Sustainability Due Diligence proposal has the potential to transform the way business is conducted in Europe. Consideration of climate change-related adverse human rights and environmental impacts should be central to due diligence frameworks in general and to the Corporate Sustainability Due Diligence (CSDD) proposal in particular.
Given the severity and irremediability of climate-related impacts, there should be no ambiguity as to whether companies are required to consider climate change in their due diligence processes. Climate change due diligence processes should entail efforts by companies to identify and address their contributions to climate-related adverse human rights and environmental impacts both in relation to their greenhouse gas emissions (across scopes 1, 2 and 3) and in relation to the adaptive capacity or resilience of rights-holders and ecosystems connected to their operations and supply chains. Furthermore, companies should undertake remediation processes where such climate-related impacts to which they have contributed cannot be avoided, which could, for example, include contributions to climate loss and damage trust funds.
Companies in the EU market should be bounded to conduct the robust due diligence practices needed to avoid, mitigate and remediate the most severe human rights and environmental impacts. But one thing is clear, no such framework can be effective unless climate change is unambiguously considered at its heart.
In this discussion paper we explore why and how climate change should be explicitly considered in human rights and environmental due diligence frameworks in general, and in particular in the EU Corporate Sustainability Due Diligence proposal published by the European Commission in February 2022. The paper is designed to stimulate debate ahead of the discussions on the Corporate Sustainability Due Diligence proposal in the European Parliament and the Council, hence we welcome any comments and feedback.