Obligations Imposed on Companies to Protect of the Environment with the Proposal for a EU Directive on Corporate Sustainability Due Diligence

Res. Asst. İclal Nihal Baraç Evci*

Climate change, which has become one of the most important environmental problems today, has started to be discussed within the framework of corporate law discipline in recent years. In this context, two important Directives have been prepared by the European Union for the purpose of reducing and preventing the environmental impacts of companies, the first of which is the Corporate Sustainability Reporting Directive 2022/2464 (EU), and the second is the Proposal for a Directive on Corporate Sustainability Due Diligence 2019/1937 (EU), which we will examine in this study.

The Corporate Sustainability Due Diligence Directive Proposal, which is the subject of this post, aims to expand the responsibilities of large-scale limited liability companies, which are thought to have a greater share in negative environmental impacts, and to prepare a framework legislation showing the principles that these companies must comply with.

Obligations are imposed on companies within the scope of the Directive, such as identifying current and potential negative effects, preventing these detected possible negative effects, ending existing negative effects, and minimizing negative effects that cannot be ended. The most important characteristic of the Directive is that these obligations are imposed for both the company’s own activities, the activities of its subsidiaries, and the activities of the companies within the “chain of activities”. The Draft Directive was subject to criticism on the grounds that the obligations in question were too heavy. Subsequently, some changes were made to the Directive by the European Union Council and the European Parliament. In the study, the Directive Proposal was examined together with the latest amendments.

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* Pîrî Reis University Law School, Department of Commercial Law.