Corporate Sustainability Due Diligence Directive (CS3D) guidelines – BusinessEurope reply to the public consultation

Introduction

BusinessEurope takes note of the Commission’s consultation on the Corporate Sustainability Due Diligence Directive (CS3D or ‘Directive’) guidelines and wishes to provide input in this process. While the Directive has just recently entered its national transposition phase, European businesses have long been making significant efforts to prepare their compliance and integrate due diligence into their operations.

The CS3D establishes a broad framework that will need to be applied across a wide range of sectors and business models. To be effective and support EU competitiveness, the guidelines should support an effective, proportionate and operational implementation of the Directive, while fully respecting the balance struck by the Omnibus I amendments. They should remain practical, illustrative and non-binding. Their purpose should be to enhance predictability and consistency across the EU, without creating new obligations, extending the practical reach of the Directive, or introducing expectations going beyond the agreed legal framework.

Business must be meaningfully involved at every stage of developing the guidelines to ensure the results are practical, workable and proportionate. The CS3D is addressed to companies, and it is companies that are well placed to determine how best to comply with its requirements in light of their own specific operations and risk profiles. Companies are also best placed to identify where additional guidance would be genuinely useful.

Against that background, BusinessEurope offers the following observations on the development of the guidelines. In particular, the guidelines should:

• be clearly non-binding and not expand the scope and obligations of the CS3D;
• be principle-based, simple and not overly prescriptive;
• support a risk-based and proportionate approach, encouraging prioritisation of efforts;
• reinforce that CS3D due diligence is an obligation of means, interpreted through reasonable, good-faith and risk-based decisions;
• support implementation that is operationally feasible, proportionate and cost-effective rather than procedural formality;
• be aligned with existing international due diligence standards;
• ensure consistency with other EU regulatory frameworks;
• help companies navigate legal conflicts, geopolitical challenges and limitations on access to information;
• provide practical support, tools and real guidance;
• promote harmonised implementation and supervision across Member States.

It is essential that once the draft guidelines are ready, stakeholders are given the opportunity to be consulted on those to be able to, where appropriate, feed practical knowledge and solutions so the guidelines produce actual tangible results.

The annex of this paper provides answers to some of the key questions in the Commission online questionnaire, and it identifies the areas where further clarification is needed and sets out recommendations for the direction the guidelines should take, drawing on relevant business practices and practical examples where available.