The new directive on corporate sustainability due diligence, informally agreed by EU co-legislators on Thursday, sets obligations for companies to mitigate their negative impact on human rights and the environment such as child labour, slavery, labour exploitation, pollution, deforestation, excessive water consumption or damage to ecosystems .

They will have to integrate so called “due diligence” into their policies and risk-management systems, including descriptions of their approach, processes and code of conduct. Firms, including financial sector, will also have to adopt a plan ensuring their business model complies with limiting global warming to 1.5°C. MEPs ensured that the management of companies with over 1000 employees will receive financial benefits for implementing the plan.

Rules applicable to big companies and those in high-risk sectors

The legislation will apply to EU companies and parent companies over 500 employees and a worldwide turnover higher than 150…