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"EU proposal on sustainable due diligence is counterproductive"

Date

23 Feb 2022

Sections

Innovation & Enterprise

Brussels/Frankfurt, 23 February 2022 – Thilo Brodtmann, Executive Director of VDMA, comments on the EU Commission's proposal for a directive on corporate sustainability due diligence:

"The proposal that the Commission has put on the table today for a directive on corporate sustainability due diligence goes too far and will not be implementable by many companies in the mechanical engineering sector - especially if it also includes customers. This approach would neither be practicable nor serve the purpose of the law. Medium-sized companies do not have the market power to influence the deeper supply chain or in particular their customers - even large corporate groups would find this difficult. Enterprises would be forced to withdraw from potentially risky markets and such a withdrawal does not lead to an improvement of the human rights situation nor the environment. On the contrary, climate and environmentally efficient technology from European companies enabling safe and ergonomic work would no longer be available in these markets. Moreover, welfare losses in Europe as well as massive losses in income and jobs would be the consequence of such a development. The envisaged civil liability further intensifies this effect.

The scope of the directive must be limited to the activities that a company can control, namely those of its own company, its subsidiaries and its direct suppliers. Anything else is unrealistic. 

We welcome the fact that the directive's obligations only apply to companies of a certain size - more than 500 employees for mechanical engineering companies. This takes account of the fact that implementation of the due diligence obligations by small companies is illusory. Even though we would have liked to see an employee threshold similar to the one applied in the German Supply Chain Act.

With the proposal presented today by the EU Commission, a Europe-wide directive is now available. In addition to the necessary improvements mentioned, it is also important to insist on a uniform implementation in the member states."

A photo of Thilo Brodtmann, Executive Director of VDMA, can be found here.

 

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