Corporate Accountability

The EU’s strategic raw materials diplomacy and partnerships are on the rise, not just since the EU has adopted the Critical Raw Materials Act to secure the supply for its renewable energy, digitalisation, defence, and space industries. Kazakhstan and the EU have initiated a Critical Raw Materials partnership in 2022. The two Kazakhstani transparency experts Mariya Lobacheva and Tatyana Sedova trace how the partneship was set up without properly informing and consulting with the public.

Multi-stakeholder initiatives (MSIs) in Germany aim to strengthen corporate due diligence. Their dialogue formats primarily bring together governmental, economic, and civil society actors based in Germany. They therefore tend to exclude, or only selectively involve, stakeholder groups (rights holders) who are (or may be) adversely affected by corporate activities. This paper illustrates the different dimensions of meaningful rights holder engagement in MSIs and highlights best practices developed by different German MSIs, thus showcasing how MSIs can contribute to due diligence implementation, at least in theory.

Today, eight years ago, the Peruvian mountain guide and small farmer Saúl Luciano Lliuya filed his civil lawsuit against RWE at the regional court in Essen in Germany. What began back then has now become one of the world's most recognised precedents for the question of whether individual major emitters must pay for protection against climate risks.

In this brief, BUND and Germanwatch examine cases of environmental degradation in value chains of European companies, for example impacts of land use, pesticides, or gas and oil operations. We also provide analyses of how proposals for the EU Corporate Sustainability Due Diligence Directive cover these impacts and highlight the pivotal role of the European Parliament in this matter.

Global consumption of raw materials at this point is not sustainable for the Earth. Germany consumes an above-average of resources compared to other countries. If they were to consume as much as Germany, it would take three Earths to satisfy global demand. We therefore welcome the German government’s initiative of a National Circular Economy Strategy to reduce raw materials demand, but press for adverse effects for the Global South to be addressed.

Lithium mining poses numerous environmental and human rights risks. As part of the Sector Dialogue Automotive Industry, Germanwatch therefore collaborated with stakeholders from industry and politics in the development of “cross-country recommendations for responsible lithium mining and recommended actions” in the “Lithium Project Group”. The paper identifies four risk areas and makes recommendations on how they can be addressed by the companies in the supply chain that mine and purchase lithium. Germanwatch supports the recommendations. However, we do see some key gaps in achieving a globally sustainable and equitable economy within planetary boundaries.

Design plays a crucial role in determining the circularity of a product, including factors such as repairability, recyclability, or the potential for refurbishment and remanufacturing. The Ecodesign for Sustainable Product Regulation (ESPR) establishes a new framework for setting ecodesign requirements for products and is therefore crucial to enable a circular economy. At present, the EU Commission, the Council and the European Parliament are negotiating the ESPR in the so-called trilogue. In this policy brief, we highlight five key issues that need to be considered to make the final version of the Regulation as effective as possible and to promote more durable and circular products.

Fatal accidents, environmental disasters, and serious human rights abuses have occurred repeatedly in the global value chains of many companies. It is therefore imperative to ensure that those affected have the means to seek redress, thereby mitigating the risks associated with human rights violations and environmental degradation. One potential avenue for remedy is through non-state-based operational grievance mechanisms, which can exist either at the corporate level or as independent entities. This policy brief examines the role of operational grievance mechanisms in the ongoing negotiations of the EU Corporate Sustainability Due Diligence Directive (CSDDD).

In our new policy brief, we analyse along with Climate & Company and Rechtsanwälte Günther why sustainability due diligence obligations for financial institutions are key to achieving the EU's climate goals. As an example for this tool, we draw on due diligence obligations for financial institutions to avoid financing projects that cause deforestation. In addition, the policy brief presents specific recommendations for regulating financial actors through the EU Corporate Sustainability Due Diligence Directive (CSDDD).

The legal report points to existing corporate CO2 reduction obligations that are currently not sufficiently taken into account by many companies. It concludes that the increasing density of corporate reporting obligations in the area of so-called ESG risks (Environment, Social, Governance) already results in implicit climate-related duties of conduct for companies, which require preventive and science-based decision-making, including at management level. The report was commissioned by the Dorothea-Laura-Janina Sick Environmental Foundation, Germanwatch, and Protect the Planet, and is based on an analysis of legal developments in the areas of corporate law, directors’ duties, sustainability due diligence duties, as well as tort law.