After years of discussion, CS3D was voted on by the European Parliament on April 24, 2024 and adopted by the Council a month later. It must now be transposed into the legislation of the Member States within two years of publication, that is to say by July 2026. This directive, also known as the duty of vigilance, requires companies to ensure that that their activity does not present risks for human rights or the environment, throughout their entire value chain. Which means for them, their subsidiaries and their suppliers. It holds companies responsible in the event of damage and will facilitate claims.
An extended version of the French duty of vigilance
The concept is not foreign to France since it is the first State to legislate on the subject by requiring the duty of vigilance for companies with more than 5,000 employees. But the European version goes much further. Firstly on the scope of the companies concerned, since the obligation concerns those with more than 1000 employees with a turnover greater than 450 million euros.
It requires them to identify, evaluate, prevent, mitigate and under certain conditions, repair the negative impacts of their activity. The violations, obligations and rights are defined by international texts, annexed to the directive. For example, on the environment, the transition of companies will have to be compatible with the Paris Agreement to limit the rise in temperature to 1.5°C.
Heavy diagnostic, reporting and prevention work
CS3D therefore involves carrying out in-depth risk mapping and providing transparent reporting. The level of sanctions is in the hands of States in their transposition, but they will have to designate a supervisory authority with powers of investigation and sanctions.
However, it seems that the directive is more an obligation of means than of results. It will still be necessary to prove that the means implemented were commensurate with the risk in the event of a problem. This engaging and complex directive panics many mid-sized companies who feel it as a burden on their non-European competition and a pit of administrative costs.
A flash of lucidity
However, it seems that Brussels has become aware of the practical difficulties of implementing this text which also collides with another reporting obligation, the CSRD. Commission President Ursula Von Der Leyen has promised, on November 8, 2024, Omnibus legislation to simplify the CS3D and the CSRD. The short-lived Barnier government also intended to get involved in this issue and this will undoubtedly be France’s position, if it has any credit left in its political instability.
A decision that worries, as reported in an article on the Novetic site, 90 NGOs and around sixty companies. They fear that this simplification will hinder the decarbonization of the economy. How can we continue to hold companies accountable for their social and environmental impacts without making them experience hell with bureaucracy? This will be the whole point of this simplification legislation that the Commission must present on February 26, 2025. In short, this year again, we will talk about CS3D.
Source: www.usinenouvelle.com
