The EU at a crucial moment for human rights and business

Luxembourg must support the European Directive on Corporate Social Responsibility!

The Commission, Council and Parliament have been negotiating the European Directive on Corporate Social Responsibility for two years. Adoption was just a formality – now it’s all up for grabs. When it comes to voting on the text on Wednesday, Luxembourg must stand by its commitments on human rights, climate and the environment and support the Directive!

The compromise reached between the European Parliament, the Commission and the Member States on the European Directive on Corporate Social Responsibility would be a milestone for the human rights, the climate and the environment. It follows two years of intense negotiations, including the Luxembourg government. Many companies in Luxembourg and the EU support the agreement.

Adoption of the compromise would normally be a formality – but the government is suddenly questioning the directive. So on Wednesday, Luxembourg could help bring it down. Victims of human rights violations in supply chains risk being left out in the cold.

Luxembourg risks undermining its credibility. According to a recent ILRES poll, 87% of Luxembourgers want the government to respect its international commitments on human rights, climate and environment. Nine out of ten also believe that the government should be transparent about its positions in EU negotiations.

So far, Luxembourg has been committed to international standards, but under pressure from the ministry of finance, it has called for investment funds to be exempted from the duty of care. The whole project is now in danger of collapsing in its final stages. According to media reports, Luxembourg is demanding that certain holding companies or “sociétés de participations financières” (Soparfis) be exempted from due diligence requirements. In the government’s coalition agreement, the government has signaled its agreement with the negotiated European directive.

It is important that Luxembourg, as a member of the UN Human Rights Council, supports the directive in this crucial phase. An abstention would also be considered a “no” vote. It is important to remember that Luxembourg has not yet adopted a national law under the pretext of the need for European legislation. Opposing European legislation now would be an irresponsible “business first” attitude to the detriment of people, climate and the environment in our supply chains.

The “Initiative pour un devoir de vigilance”, which has 17 member organizations from civil society, and “Finance & Human Rights asbl” call on the government to say a clear YES to the European Directive on corporate sustainability due diligence, as a NO vote or abstention is synonymous with a loss of credibility.

Luxembourg, February 12, 2024