Policy recommendations on Article 15 “Combating climate change” of the proposed EU Corporate Sustainability Due Diligence Directive

In light of the severity and the short timeframe that remains to take action to limit global warming to 1.5 degrees, it is important that the EU Corporate Sustainability Due Diligence Directive (CSDDD) leaves no legal ambiguity concerning corporate obligations regarding climate change.

Climate experts from Germanwatch and 16 other NGOs have published a list of recommendations for the design of Article 15 of the EU proposal for a CSDDD. Article 15 of the proposal contains climate-related obligations for companies.

The paper calls for:

1. A clear obligation to implement the envisaged transition plans, to ensure companies do not abuse them as a tool for greenwashing;
2. An obligation for all companies covered by the Directive to set short-, medium- and long-term targets for reducing their greenhouse gas emissions in line with the 1.5-degree limit of the Paris Agreement;
3. More specific requirements for the transition plans, in line with the relevant rules of the Corporate Sustainability Reporting Directive (CSRD) and the draft EU reporting standards: a clear coverage of emissions across the entire value chain (scopes 1-3) and an explanation of the concrete actions taken to achieve the short, long and medium term reduction targets;
4. A coherent approach to the prevention and redress of adverse climate and environmental impacts, including corresponding amendments to the definition of “adverse environmental impacts” in Article 3(b) of the Commission's proposal, to the effect of a comprehensive list of the potentially effected environmental goods;
5. Linking the variable remuneration of directors to the achievement of the targets set out in the transition plan.

Frank Bold, Amnesty International, ClientEarth, Friends of the Earth Europe, Oxfam and WWF have, among others, co-signed the paper.