we need a change of mindset where executives, investors and shareholders will eventually put people and the planet before short-term profits

“Doing business in 2022 must mean doing business responsibly”, stated MEP Lara Wolters (S&D), when opening the special session of industriAll Europe’s Company Policy Committee on human rights and environmental due diligence.

In 2021, the MEP’s report on corporate due diligence and corporate accountability was adopted with an overwhelming majority in the European Parliament. The report made far-reaching recommendations to the Commission on making responsible business conduct a reality in Europe. Recommendations included mandatory rules on preventing, monitoring, reporting and remedying violations of human rights and environmental norms by multinational companies and their subcontractors, as well as deterrent sanctions and effective civil liability mechanisms, among other things.

A proposal for a directive was eventually put forward by the European Commission in February 2022. It represents a big step forward, but falls short of initial expectations. Only large companies would be subject to binding rules, enforcement mechanisms would be weak, and there would be no proper involvement of trade unions and worker representatives in the design and implementation of due diligence policies.

“We want to see more companies covered by the Directive and better access to justice for victims of human rights violations and environmental catastrophes”, said Lara Wolters, who has been appointed rapporteur of the European Parliament’s committee in charge of reviewing the proposed Directive.

IndustriAll Europe has long been advocating for a paradigm shift in the way multinational companies are governed: moving away from a short-term, financial perspective aimed at purely serving shareholders’ interests, to one that embraces a long-term, sustainable strategic management of companies that benefits all.

Judith Kirton-Darling, industriAll Europe Deputy General Secretary:

“We support Lara Wolters in saying that we need a change of mindset where executives, investors and shareholders will eventually put people and the planet before short-term profits. This new mindset must apply to the operation of companies as well as their upstream and downstream subcontractors all around the globe”.

Trade unions will not cease to push for legislation that ensures that companies operating in Europe are managed in a sustainable, fair and socially responsible way, with the full involvement of workers and their trade union representatives.”

At their first face-to-face meeting in two years, the members of industriAll Europe’s Company Policy Committee reiterated their resolve to advocate for ambitious directives promoting ambitious corporate reporting, due diligence and governance.

In the context of a war that is forcing companies to search for alternative suppliers and business partners globally, for instance in the energy sector, a floor of minimum social, environmental and human rights standards is more important than ever.

Due diligence does not stop at European borders. Kemal Özkan, Assistant General Secretary of IndustriALL Global Union, recalled that trade unions are fighting for compliance and enforcement of workers’ fundamental rights in all continents. Different types of instruments exist and chances to be protected, seek redress, and claim damages from violations of workers’ fundamental rights are very uneven.

“There are several different systems and legal frameworks for due diligence. We need to fit them together to create an overall coherent picture that improves working conditions in all sectors, all countries, and for all workers, said Kemal Özkan.

”We need strong binding EU rules on due diligence and at the same time the EU’s firm commitment to push for the UN Treaty on Business and Human Rights, which still awaits adoption.”

IndustriAll Europe's demands towards mandatory responsible business conduct: DE EN FR
IndustriAll Europe’s preliminary analysis of the European Commission’s proposal for a Directive on corporate sustainability due diligence: EN

Contact: Andrea Husen-Bradley (press and communication), Aline Conchon (senior policy adviser)