As the European Union (EU) prepares to vote on a landmark Corporate Sustainability Due Diligence Directive (CSDDD), nearly 30 Finnish NGOs have made a compelling appeal to the Finnish government to endorse the directive. This comes amidst concerns that Finland may abstain from voting, a move that could potentially derail the directive that aims to enforce corporate accountability for human rights and environmental impacts within global supply chains.
The Finnish government's sudden hesitation to support the directive, previously championed by Finland itself, has sparked disappointment and confusion among civil society organizations. Outi Hakkarainen, an expert on sustainable economy from Fingo, expressed dismay over the government's readiness to jeopardize a directive that has been the subject of years of negotiation and is crucial for advancing corporate responsibility at an EU level.
This directive, which has been in the pipeline for a considerable time, proposes to impose obligations on large companies to identify, address, and mitigate adverse environmental and human rights impacts within their operations and supply chains. It also calls for companies to develop and implement transition plans aligned with the goals of the Paris Agreement.
The Finnish Parliament's Grand Committee is set to decide Finland's official stance on the directive just one day before the EU vote, following an appeal by 28 organizations through a letter urging lawmakers to support the directive. The NGOs argue that the directive would enhance the competitiveness of businesses that prioritize sustainability, offering a unified framework that reduces uncertainty regarding the expected corporate responsibility standards across the EU.
Critics of the Finnish government's stance, including Sonja Finér, Executive Director of Finnwatch, argue that failing to support the CSDDD would be a step back in efforts to regulate corporate accountability for human rights and environmental standards. The government's concerns reportedly revolve around specific aspects of the directive, such as the expansion of class action rights and evidence disclosure obligations, which are seen as essential for ensuring access to justice for victims of corporate abuses.
Meanwhile, the German Institute for Human Rights has called on the German government and other EU member states to back the CSDDD, highlighting the importance of harmonizing due diligence regulations to prevent a fragmented landscape of national laws. The directive, seen as pivotal for protecting human rights and the environment, faces the risk of being blocked due to internal disagreements among EU members, including Germany.
As the vote approaches, the outcome remains uncertain, with the potential for Finland's decision to significantly influence the directive's fate. The situation underscores the broader debate on corporate responsibility within the EU, the need for cohesive action to safeguard human rights and the environment, and the role of national governments in shaping international corporate governance standards.