Preamble 1 to 10.
(1) As stated in Article 2 of the Treaty on European Union (TEU), the Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights as enshrined in the Charter of Fundamental Rights of the European Union (the ‘Charter’).
Those core values, that have inspired the Union’s own creation, as well as the universality and indivisibility of human rights, and respect for the principles of the Charter of the United Nations (UN) and international law, should guide the Union’s action on the international scene. Such action includes fostering the sustainable economic, social and environmental development of developing countries.
(2) In line with Article 191 of the Treaty on the Functioning of the European Union (TFEU), a high level of protection and improvement of the quality of the environment and promoting European core values are among the priorities of the Union, as set out in the communication of the Commission of 11 December 2019 on A European Green Deal. These objectives require the involvement not only of public authorities but also of private actors, in particular companies.
(3) In its Communication of 14 January 2020 on a Strong Social Europe for Just Transition, the Commission committed to upgrading Europe’s social market economy to achieve a just transition to sustainability, ensuring that no-one is left behind. This Directive will also contribute to the European Pillar of Social Rights, which promotes rights ensuring fair working conditions. It forms part of the Union policies and strategies relating to the promotion of decent work worldwide, including in global value chains, as referred to in the communication of the Commission of 23 February 2022 on decent work worldwide.
(4) The behaviour of companies across all sectors of the economy is key to success with regard to the Union’s sustainability objectives as Union companies, especially large ones, rely on global value chains. It is also in the interest of companies to protect human rights and the environment, in particular given the rising concern of consumers and investors regarding these topics. Several initiatives fostering enterprises which support a value-oriented transformation already exist at Union, as well as national level.
(5) Existing international standards on responsible business conduct specify that companies should protect human rights and set out how they should address the protection of the environment across their operations and value chains. The UN Guiding Principles on Business and Human Rights (UN Guiding Principles) recognise the responsibility of companies to exercise human rights due diligence by identifying, preventing and mitigating the adverse impacts of their operations on human rights and by accounting for how they address those impacts.
The UN Guiding Principles state that businesses should avoid infringing human rights and should address adverse human rights impacts that they have caused, contributed to or are linked with in their own operations, those of their subsidiaries and through their direct and indirect business relationships.
(6) The concept of human rights due diligence was specified and further developed in the Guidelines for Multinational Enterprises (MNE Guidelines) of the Organisation for Economic Cooperation and Development (OECD) which extended the application of due diligence to environmental and governance topics.
The OECD Due Diligence Guidance for Responsible Business Conduct (Guidance for Responsible Business Conduct) and sectoral guidance are internationally recognised frameworks setting out practical due diligence steps to help companies identify, prevent, mitigate and account for how they address actual and potential impacts in their operations, supply chains and other business relationships. The concept of due diligence is also embedded in the recommendations of the International Labour Organization’s (ILO) Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy.
(7) All businesses have a responsibility to respect human rights, which are universal, indivisible, interdependent and interrelated.
(8) The UN Sustainable Development Goals, adopted by all UN Member States in 2015, include the objectives to promote sustained, inclusive and sustainable economic growth. The Union has set itself the objective to deliver on the UN Sustainable Development Goals. The private sector contributes to those aims.
(9) Global value chains, and in particular critical raw materials value chains, are impacted by detrimental effects of natural or man-made hazards. The frequency and impact of shocks involving risks to critical value chains are likely to increase in the future. The private sector could play an important role in promoting sustained, inclusive and sustainable economic growth, while avoiding the creation of imbalances on the internal market. This underlines the importance of strengthening the resilience of companies in relation to adverse scenarios related to their value chains, taking into account externalities as well as social, environmental and governance risks.
(10) International agreements under the UN Framework Convention on Climate Change, to which the Union and its Member States are parties, such as the Paris Agreement under the UN Framework Convention on Climate Change adopted on 12 December 2015 (the ‘Paris Agreement’) and the recent Glasgow Climate Pact, set out precise avenues to address climate change and keep global warming within 1,5 oC degrees. Besides specific actions being expected from all signatory Parties, the role of the private sector, in particular its investment strategies, is also considered central to achieve these objectives.
Note: This is the final text of the Corporate Sustainability Due Diligence Directive (CSDDD), published in the Official Journal of the European Union in July 2024.