The EU plan to introduce a mandatory human rights and environmental due diligence framework for corporates was substantially progressed on 23 February 2022, with the publication of a legislative proposal setting out highly impactful corporate and director due diligence duties.

The creation of an EU legal framework for due diligence is likely to yield greater harmonisation in a largely non-homogenous area; giving companies legal certainty and ensuring a level playing field within the EU.  However, the costs, potential competitive disadvantages and challenges for EU companies investing in third countries with weak human rights and environmental protections represent real and substantive compliance hurdles for in-scope companies. 

Check out our factsheet on the proposed EU corporate sustainability due diligence legislation and get in touch with any of the ESG & Sustainability Practice Group, or your usual William Fry contact with any related queries or requests.

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