European Parliament Approves Corporate Responsibility Directive: Companies Required to Adhere to Duty of Care

The Corporate Responsibility Directive recently gained attention as the Council of Member States debated overturning it. The European Parliament, however, finally approved the directive on Wednesday, requiring companies to adhere to a duty of care in their value chains.

The directive aims to address issues such as child labor, labor exploitation, biodiversity loss, and environmental pollution. Green MEP Heidi Hautala, who has been working on the directive for a long time, expressed optimism about the outcome. She was joined by Lara Wolters and Manon Aubryn in a documentary about the development of the Corporate Responsibility Directive.

Under the directive, companies with at least one thousand employees and a turnover of at least EUR 450 million are required to comply with the duty of care. Despite some delays and disagreements between member states, including Finland’s pushback against a clause on class action lawsuits, the core legislation of the directive remained unchanged. In March, Belgium managed to secure necessary majority support from member states after several attempts. The directive still awaits final approval from the Council of Member States before coming into effect.