Corporate Sustainability Due Diligence Directive

FuelsEurope is convinced that corporate social responsibility contributes to a sustainable, long-term economic and social development. The refining sector is committed to respecting human rights and its business practices reflect elements of instruments such as the UN Guiding Principles on Business and Human Rights and the OECD Due Diligence Guidance for Responsible Businesses. In this context, we recognise the potential of due diligence in order to help support respecting human rights and preserve the environment.

We acknowledge the Corporate Sustainability Due Diligence Directive (CSDDD) ambition to create a harmonised legislative framework for due diligence on human rights and environment.

In order to guarantee an effective EU-harmonised mandatory due diligence, the Directive should seek to ensure both legal certainty and proportionality in view of avoiding excessive administrative burdens for the companies and unintended consequences for the EU economy. To achieve these objectives, we would like to contribute with the following suggestions.

In fact, legal certainty and predictability on the liabilities set forth in the proposal are essential to enable companies to effectively embed a corporate social responsibility approach in their corporate governance and business models.

The corporate sustainability is a subject that, despite the increasing attention and evolution, does still not have a consolidated definition. This is also the reason why the existing framework is still based on soft law instruments. Those instruments better suited to the issue, allowing a dynamic and flexible approach.

Finally, it should be remarked that the corporate sustainability is based on the three ESG pillars (environment, social and governance) that should grant the creation of long-term value from the business activities. For this reason, a careful and balanced approach is needed. Moreover, any legislation in the field should be based on the principle that businesses create value and a punitive approach should be avoided.

Due to the initiatives undertaken by some EU Member States to introduce a mandatory sustainability due diligence, we appreciate the intention of the EU Institutions to create an EU-harmonised legislative framework on the subject. To achieve this objective, the Co-legislators should grant clarity and proportionality to ensure an intra and extra-EU level playing field, a competitive and sustainable internal market and to avoid the risk of forum shopping as well excessive administrative burdens.

Member States - according to international conventions and agreements, EU legislation and national constitutional law - have the role to respect and protect human rights and contribute to achieve the EU climate objectives.

EU companies already act in a complex regulatory framework which goes from the general principles of tort law and transparency obligations for listed companies to EU-derived legislations on corporate, criminal and environmental liability, shareholders rights, carbon market obligations, sustainability reporting, consumers rights and much more.

Compliance with this extensive framework and EU companies’ investment efforts to facilitate the best production, working and environmental standards have helped make the EU to become a leader in developing a sustainable economy. However, the increasing compliance obligations risk diverting limited resources that enhance the positive trajectory of EU companies and can lead to a loss of competitiveness of the EU economy.

In this context, the Corporate Sustainability Due Diligence Directive should be targeted and should avoid overlaps with existing and upcoming legislation. In a globalised economy, with complex supply chains and a highly-competitive market, companies’ leverage is limited, especially on the outer edge part of the supply chain and even more on the value chain.