Changes from adopted text to adopted text

RemovedRecital 7: (7) The United Nations’ Sustainable Development Goals83 , adopted by all United Nations Member States in 2015, include the objectives to promote sustained, inclusive and sustainable economic growth. The Union has set itself the objective to deliver on the UN Sustainable Development Goals. The private sector contributes to those aims. In the current geopolitical situation arising from Russian aggression in Ukraine, the energy crisis, the continuing fallout from COVID-19 and attempts to maintain and strengthen the security of the agri-food chain, the private sector could help promote sustained, inclusive and sustainable economic growth, while avoiding the creation of imbalances on the internal market.

RemovedRecital 8: (8) International agreements under the United Nations Framework Convention on Climate Change, to which the Union and the Member States are parties, such as the Paris Agreement84 and the recent Glasgow Climate Pact85 , set out precise avenues to address climate change and keep global warming within 1.5 C degrees. Besides specific actions being expected from all signatory Parties, the role of the private sector, in particular its investment strategies is also considered central to achieve these objectives. While just 100 companies have been the source of more than 70% of the world’s greenhouse gas emissions since 1988, there is a fundamental mismatch between corporate climate commitments and their actual investments to fight against climate change. This Directive is therefore an important legislative tool to avoid any misleading climate neutrality claims and to stop greenwashing and fossil fuels expansion worldwide in order to achieve international and European climate objectives, also recommended by the latest scientific reports85a. / 85a CDP Carbon Majors Report, 2017 Influence Map Report, Big Oil's Real Agenda on Climate Change 2022, September 2022, https://influencemap.org/report/Big-Oil-s-Agenda-on-Climate-Change-2022-19585 IEA, Net Zero by 2050, A Roadmap for the Global Energy Sector, p. 51.

RemovedRecital 9: (9) In the European Climate Law86 , the Union also legally committed to becoming climate-neutral by 2050 and to reducing emissions by at least 55% by 2030. Both these commitments require changing the way in which companies produce and procure. The Commission’s 2030 Climate Target Plan87 models various degrees of emission reductions required from different economic sectors, though all need to see considerable reductions under all scenarios for the Union to meet its climate objectives. The Plan also underlines that “changes in corporate governance rules and practices, including on sustainable finance, will make company owners and managers prioritise sustainability objectives in their actions and strategies.” The General Union Environmental Action Programme to 2030 87a (‘8th EAP’), the framework for Union action in the field of the environment and climate, aims to accelerate the green transition to a climate-neutral, sustainable, non-toxic, resource-efficient, renewable energy-based, resilient and competitive circular economy in a just, equitable and inclusive way, and to protect, restore and improve the state of the environment by, inter alia, halting and reversing biodiversity loss. The 2019 Communication on the European Green Deal88 sets out that all Union actions and policies should pull together to help the Union achieve a successful and just transition towards a sustainable future in which no one is left behind. It also sets out that sustainability should be further embedd…

RemovedRecital 11: (11) The Action Plan on a Circular Economy91 , the Biodiversity strategy92 , the Farm to Fork strategy93 and the Chemicals strategy94, the Pharmaceutical Strategy, the 2021 EU Action Plan Towards Zero Pollution for Air, Water and Soil and Updating the 2020 New Industrial Strategy: Building a stronger Single Market for Europe’s recovery95, Industry 5.096 and the European Pillar of Social Rights Action Plan97 and the 2021 Trade Policy Review98 list an initiative on sustainable corporate governance among their elements. Due diligence requirements under this Directive should therefore contribute to preserving and restoring biodiversity and by improving the state of the environment, in particular air, water and soil. They should also contribute towards accelerating the transition to a non-toxic circular economy. Due diligence requirements under this Directive should also contribute to the objectives of the Zero Pollution Action Plan of creating a toxic-free environment and protecting the health and well-being of people, animals and ecosystems from environment-related risks and negative impacts.

RemovedRecital 12: (12) This Directive is in coherence with the EU Action Plan on Human Rights and Democracy 2020-202499. This Action Plan defines as a priority to strengthen the Union’s engagement to actively promote the global implementation of the United Nations Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises as clarified in the OECD Due Diligence Guidance for Responsible Business Conduct as the relevant guidelines, including by advancing relevant due diligence standards.

RemovedRecital 13: (13) The European Parliament, in its resolution of 10 March 2021 calls upon the Commission to propose Union rules for comprehensive corporate due diligence obligations, with consequences including civil liability for those companies that cause or contribute to harm by failing to carry out due diligence 100 . The Council Conclusions on Human Rights and Decent Work in Global Supply Chains of 1 December 2020 called upon the Commission to table a proposal for a Union legal framework on sustainable corporate governance, including cross-sector corporate due diligence obligations along global supply chains.101 The European Parliament also calls for clarifying directors` duties in its own initiative report adopted on 2 December 2020 on sustainable corporate governance. In their Joint Declaration on EU Legislative Priorities for 2022102 , the European Parliament, the Council of the European Union and the Commission have committed, to deliver on an economy that works for people, and to improve the regulatory framework on sustainable corporate governance.

AddedP9_TC1-COD(2022)0051

RemovedRecital 14: (14) This Directive aims to ensure that companies active in the internal market contribute to sustainable development and the sustainability transition of economies and societies by respecting human rights and the environment, through the identification, prevention and mitigation, bringing to an end remediation and minimisation, and where necessary, prioritisation, of potential or actual adverse human rights and environmental impacts connected with companies’ own operations, subsidiaries and value chains, and ensuring that those affected by a failure to respect this duty have access to justice and legal remedies. This Directive should be without prejudice to the responsibility of Member States to respect and the duty to protect human rights and the environment under international law.

AddedPosition of the European Parliament adopted at first reading on 24 April 2024 with a view to the adoption of Directive (EU) 2024/… of the European Parliament and of the Council on corporate sustainability due diligence and amending Directive (EU) 2019/1937 and Regulation (EU) 2023/2859

RemovedRecital 15: (15) Companies should take appropriate steps within their means to set up and carry out due diligence measures, with respect to their own operations, those of their subsidiaries, as well as their direct and indirect business relationships in their value chains in accordance with the provisions of this Directive. This Directive should not require companies to guarantee, in all circumstances, that adverse impacts will never occur or that they will be stopped. For example with respect to business relationships where the adverse impact results from State intervention, the company might not be in a position to arrive at such results. Therefore, the main obligations in this Directive should be ‘obligations of means’. The company should take the appropriate measures which can reasonably be expected to result in prevention or minimisation of the adverse impact under the circumstances of the specific case, proportionate and commensurate to the degree of severity and the likelihood of the adverse impact and the size, resources, and capacities of the company. Account should be taken of the specificities of the company’s value chain, sector or geographical area in which its value chain partners operate, the company’s power to influence its business relationships, and whether the company could increase its power of influence.

Added(As an agreement was reached between Parliament and Council, Parliament's position corresponds to the final legislative act, Directive (EU) 2024/1760.)

RemovedRecital 16: (16) The due diligence process set out in this Directive should cover the six steps defined by the OECD Due Diligence Guidance for Responsible Business Conduct, which include due diligence measures for companies to identify and address adverse human rights and environmental impacts. This encompasses the following steps: (1) integrating due diligence into policies and management systems, (2) identifying and assessing adverse human rights and environmental impacts, (3) preventing, ceasing or minimising actual and potential adverse human rights and environmental impacts, (4) verifying, monitoring and assessing the effectiveness of measures, (5) communicating, (6) providing remediation.

RemovedRecital 17: (17) Adverse human rights, and environmental impacts occur in companies’ own operations, subsidiaries, products, services, and in their value chains, in particular at the level of raw material sourcing, manufacturing, or at the level of product or waste disposal. In order for the due diligence to have a meaningful impact, it should cover human rights, and environmental adverse impacts generated throughout the life-cycle of production and sale and waste management of product or provision of services, at the level of own operations, subsidiaries and in value chains.

RemovedRecital 17 a (new): (17a) Global value chains in particular critical raw materials value chains, are impacted by detrimental effects of natural or man-made hazards. The risks in critical value chains have been made apparent by the COVID-19 crisis while the frequency and impact of those shocks are likely to increase in the future, constituting a driver for inflation and leading to a subsequent increase of macroeconomic volatility as well as market and trade uncertainty. To address this, the EU should initiate an annual Union-wide assessment of the resilience of companies to adverse scenarios related to their value chains, that would map, assess and provide potential responses to their value chain risks, including externalities as well as social, environmental and political risks.

RemovedRecital 18: (18) The value chain should cover activities related to the production, distribution and sale of a good or provision of services by a company, including the development of the product or the service and waste management of the product as well as the related activities of business relationships of the company. It should encompass the activities of a company’s business relationships related to the design, extraction, manufacture, transport, storage and supply of raw material, products, parts of products, as well as the sale or distribution of goods or the provision or development of services, including waste management, transport and storage, excluding the waste management of the product by individual consumers.

RemovedRecital 18 a (new): (18a) In some situations once products are sold or distributed by a business relationship, companies may have diminished ability to monitor impacts in order to take reasonable steps to prevent or mitigate them. In such situations, identifying actual and potential impacts and taking preventive or mitigating actions will be important prior to and at the point of initial sale or distribution, and in follow up or ongoing interactions with those business relationships when such impacts are reasonably foreseeable or when notified of significant impacts through the notification procedure.

RemovedRecital 18 b (new): (18b) When a company sources products containing recycled material, it may be difficult to verify the origins of the secondary raw materials. In such situations the company should take appropriate measures to trace secondary raw materials to the relevant supplier and evaluate whether there is adequate information to demonstrate that the material is recycled.

RemovedRecital 19: (19) As regards regulated financial undertakings providing financial services, linked to the conclusion of a contract within a value chain, the provision of such services should include the activities of the clients directly receiving them, and the subsidiaries thereof whose activities are linked to the contract in question. In order to avoid an overlap of due diligence exercises of regulated financial undertaking, activities of companies or other legal entities that are part of the value chain of that client are excluded from the scope of this Directive if due diligence obligations are set elsewhere under EU law. Clients that are households and natural persons not acting in a professional or business capacity, as well as small and medium sized undertakings, should not be considered to be part of the value chain of regulated financial undertakings.

RemovedRecital 19 a (new): (19a) Regulated financial undertakings as well as other companies should use information beyond the information derived from credit rating agencies, sustainability rating agencies or benchmark administrators.

RemovedRecital 20: deleted

RemovedRecital 21: (21) Under this Directive, EU companies with more than 250 employees on average and a worldwide net turnover exceeding EUR 40 million in the financial year preceding the last financial year or companies which are the ultimate parent company of a group that had 500 employees and a net worldwide turnover of more than 150 million in the last financial year for which annual financial statements have been prepared should be required to comply with due diligence. The calculation of the thresholds should include the number of employees and turnover of a company’s branches, which are places of business other than the head office that are legally dependent on it, and therefore considered as part of the company, in accordance with EU and national legislation. Temporary agency workers and other workers in non-standard forms of employment, including those posted under Article 1(3), point (c), of Directive 96/71/EC, as amended by Directive (EU) 2018/957 of the European Parliament and of the Council103 , should be included in the calculation of the number of employees in the user company. Posted workers under Article 1(3), points (a) and (b), of Directive 96/71/EC, as amended by Directive 2018/957/EU, should only be included in the calculation of the number of employees of the sending company.

RemovedRecital 22: (22) In order to reflect the priority areas of international action aimed at tackling human rights and environmental issues, the Commission should develop sector-specific guidelines, including for the following sectors, based on existing sectoral OECD due diligence guidance: the manufacture of textiles, wearing apparel, leather and related products (including footwear), and the wholesale trade and retail of textiles, clothing and footwear; agriculture, forestry, fisheries (including aquaculture), the manufacture of food products, marketing and advertising of food and beverages, and the wholesale trade of agricultural raw materials, live animals, animal products, wood, food, and beverages; energy, the extraction, transport and handling of mineral resources regardless of where they are extracted from (including crude petroleum, natural gas, coal, lignite, metals and metal ores, as well as all other, non-metallic minerals and quarry products), the manufacture of basic metal products, other non-metallic mineral products and fabricated metal products (except machinery and equipment), and the wholesale trade of mineral resources, basic and intermediate mineral products (including metals and metal ores, construction materials, fuels, chemicals and other intermediate products), construction and related activities, the provision of financial services,, investment services and activities and other financial services; and the production, provision and distribution of information and com…

RemovedRecital 23: (23) In order to achieve fully the objectives of this Directive addressing human rights and environmental adverse impacts with respect to companies’ operations, and those of its subsidiaries and value chains, third-country companies with significant operations in the EU should also be covered. More specifically, the Directive should apply to third-country companies which generated a net turnover of at least EUR 40 million in the Union in the financial year preceding the last financial year or companies which are the ultimate parent company of a group that had 500 employees and a net worldwide turnover of more than 150 million and at least 40 million was generated in the Union in the last financial year for which annual financial statements have been prepared. The calculation of net turnover should include turnover generated by third party companies with whom the company and/or its subsidiaries has entered into a vertical agreement in the Union in return for royalties.

RemovedRecital 25: (25) In order to achieve a meaningful contribution to the sustainability transition, due diligence under this Directive should be carried out with respect to adverse human rights impact on protected persons resulting from any action which removes or reduces the ability of an individual or group to enjoy the rights or to be protected by prohibitions enshrined in the international conventions and instruments listed in the Annex to this Directive, and subsequent case law and the work of treaty bodies related to these conventions, which include trade union, workers’ and social rights. In order to ensure a comprehensive coverage of human rights, a negative impact on the enjoyment of a right not specifically listed in that Annex which directly impairs a legal interest protected in those conventions and instruments should also form part of the adverse human rights impact covered by this Directive, provided that the company concerned could have reasonably established the risk of such impairment and any appropriate measures to be taken in order to comply with the due diligence obligations under this Directive, taking into account all relevant circumstances of their operations, such as the sector and operational context. Due diligence should further encompass adverse environmental impacts resulting from the violation of one of the prohibitions and obligations listed in the Annex to this Directive.

RemovedRecital 25 a (new): (25a) This Directive should provide for specific measures in case of adverse systemic state-sponsored impacts resulting from actions, policies, regulations or institutionalised practices decided, implemented and enforced by, or carried out with the active support of States’ national or local authorities.

RemovedRecital 25 b (new): (25b) Companies should also be responsible for using their influence to contribute to an adequate standard of living in value chains. This is understood as a living wage for employees and a living income for self-employed workers and smallholders, which they earn from their work and production and must meet their needs and those of their family.

RemovedRecital 25 c (new): (25c) This Directive acknowledges the 'One Health' approach as recognised by the World Health Organization, an integrated and unifying approach that aims to sustainably balance and optimise the health of people, animals and ecosystems. The 'One Health' approach recognises that the health of humans, domestic and wild animals, plants, and the wider environment, including ecosystems, are closely interlinked and interdependent. It is therefore appropriate to lay down that environmental due diligence should encompass avoiding environmental degradation that results in adverse health effects such as epidemics, and to respect the right to a clean, healthy and sustainable environment. In respect to the G7 commitment to acknowledge the rapid rise in antimicrobial resistance (AMR) at the global scale, it is necessary to promote the prudent and responsible use of antibiotics in human and veterinary medicines.

RemovedRecital 25 d (new): (25d) Adverse human rights and environmental impacts can be intertwined or underpinned by factors such as corruption and bribery, hence their inclusion in the OECD Guidelines for Multinational Enterprises. It therefore may be necessary for companies to take into account these factors when carrying out human rights and environmental due diligence.

RemovedRecital 26: (26) Companies should have guidance at their disposal that illustrates how their activities may impact human rights and which corporate behaviour is prohibited in accordance with internationally recognised human rights. Such guidance is included for instance in The United Nations Guiding Principles Reporting Framework104 and the United Nations Guiding Principles Interpretative Guide105 and should be made easily accessible to companies. Therefore, using relevant international guidelines and standards as a reference, the Commission should be able to issue additional guidance that will serve as a practical tool for companies.

RemovedRecital 27: (27) In order to conduct appropriate human rights and environmental due diligence with respect to their operations, their subsidiaries, and their value chains, companies covered by this Directive should integrate due diligence into corporate policies, identify, where necessary, prioritise, prevent, mitigate, remediate as well as bring to an end and minimise the extent of potential and actual adverse human rights and environmental impacts, establish or participate in a notification and non-judicial grievance mechanism, monitor and verify the effectiveness of their actions taken in accordance with the requirements that are set up in this Directive, communicate publicly on their due diligence, and engage with affected stakeholders throughout this entire process. In order to ensure clarity for companies, in particular the steps of preventing and mitigating potential adverse impacts and of bringing to an end, or when this is not possible, minimising the extent of actual adverse impacts should be clearly distinguished in this Directive.

RemovedRecital 28: (28) In order to ensure that due diligence forms part of companies’ corporate policies, and in line with the relevant international framework, companies should integrate due diligence into their relevant corporate policies and at all levels of operation and have in place a due diligence policy with short-, medium- and long-term measures and targets. The due diligence policy should contain a description of the company’s approach to due diligence, a code of conduct defining the rules, principles and measures to be followed and implemented where relevant throughout the company and its subsidiaries across all corporate operations; a description of the processes put in place and appropriate measures taken to implement due diligence in line with Articles 7 and 8 in the value chain, including the relevant measures taken to incorporate due diligence into its own business model, employment and purchasing practices with entities with which the company has a business relationship and measures taken to monitor and verify due diligence activities, and adequate policies to avoid passing on the costs of the due diligence process to business partners in a weaker position. The code of conduct should apply in all relevant corporate functions and operations, including pricing practices and purchasing decisions, for instance on trading and procurement. Companies should also update their due diligence policy when significant changes occur.

RemovedRecital 28 a (new): (28a) Parent companies should be able to perform actions which can contribute to the due diligence of their subsidiaries, where the subsidiary provides all the relevant and necessary information to and cooperates with its parent company, abides by its parent company's due diligence policy, the parent accordingly adapts its due diligence policy to ensure that the obligations laid down in Article 5(1) are fulfilled with respect to the subsidiary, the subsidiary integrates due diligence into all its policies and risk management systems in accordance with Article 5, where necessary, the subsidiary continues to take appropriate measures in accordance with Articles 7 and 8, as well as continues to perform its obligations under Articles 8a, 8b and 8d, where the parent company performs specific actions on behalf of the subsidiary, both the parent company and subsidiary clearly and transparently communicate so towards relevant stakeholders and the public domain, and the subsidiary integrates climate in its policies and risk management systems in accordance with Article 15. In order to hold subsidiaries accountable, the liability provided for in Article 22 of this Directive should remain at entity level without prejudice to Members States’ legislation on joint and several liability.

RemovedRecital 28 b (new): (28b) In conflict-affected and high-risk areas, companies run an increased risk to be involved in severe human rights’ abuses. In these areas, companies should therefore undertake heightened, conflict-sensitive due diligence, in order to address these heightened risks and to ensure that they do not facilitate, finance, exacerbate or otherwise negatively impact the conflict or contribute to violations of international human rights law or international humanitarian law in conflict-affected or high-risk areas. Heightened due diligence includes complementing the standard due diligence with a thorough conflict analysis, based on meaningful and conflict-sensitive stakeholder engagement and aimed at ensuring an understanding of the root causes, triggers and parties driving the conflict and the impact of the company’s business activities on the conflict. In situations of armed conflict and/or military occupation, companies should respect the obligations and standards identified in International Humanitarian Law (IHL) and International Criminal Law (ICL) standards. Companies should follow guidance provided by relevant international bodies, including the International Committee of the Red Cross and the UNDP.

RemovedRecital 28 c (new): (28c) The way a company can be involved in an adverse impact varies. A company can cause an adverse impact where its activities on their own are sufficient to result in an adverse impact. A company can contribute to an adverse impact where its own activities, in combination with the activities of other entities, cause an impact, or that the activities of the company cause, facilitate or incentivise another entity to cause an adverse impact. The contribution must be substantial, meaning that it does not include minor or trivial contributions. Assessing the substantial nature of the contribution and understanding when the actions of the company may have caused, facilitated or incentivised another entity to cause an adverse impact can involve the consideration of multiple factors. Several factors can be taken into account, including the extent to which a company may encourage or motivate an adverse impact by another entity, i.e. the degree to which the activity increased the risk of the impact occurring, the extent to which a company could or should have known about the adverse impact or potential for adverse impact, i.e. the degree of foreseeability, and the degree to which any of the company's activities actually mitigated the adverse impact or decreased the risk of the impact occurring. The mere existence of a business relationship or activities which create the general conditions in which it is possible for adverse impacts to occur should not in itself constitute a relations…

RemovedRecital 29: (29) To comply with due diligence obligations, companies need to take appropriate measures with respect to identification, prevention and bringing to an end adverse impacts that they caused, contributed or are directly linked to. ‘Appropriate measures’ should mean measures that are capable of achieving the objectives of due diligence and effectively addressing the adverse impact identified pursuant to Article 6 in a manner proportionate and commensurate to the degree of severity and the likelihood of the adverse impact and proportionate and commensurate to the size, resources and capacities of the company, taking into account the circumstances of the specific case, including the nature of the adverse impact, characteristics of the economic sector, the nature of the company’s specific activities, products, services, the specific business relationship. For the purposes of Articles 7 and 8, in cases where a company has caused or may have caused an impact, appropriate measures should be understood as measures which aim to prevent or mitigate an impact, and remediate any damage caused by an impact. For the purposes of Articles 7 and 8, in cases where a company has contributed to or may have contributed to an impact, appropriate measures should be understood as measures which aim to prevent or mitigate the contribution to the impact, using or increasing the company’s leverage with other responsible parties to prevent or mitigate the impact, and contributing to remediating any damag…

RemovedRecital 30: (30) Under the due diligence obligations set out by this Directive, a company should identify and assess actual or potential adverse human rights and environmental impacts. In order to allow for a comprehensive identification and assessment of adverse impacts, such identification and assessment should be based on meaningful stakeholder engagement and quantitative and qualitative information. For instance, as regards adverse environmental impacts, the company should obtain information about baseline conditions at higher risk sites or facilities in value chains. Identification and assessment of adverse impacts should include assessing the human rights and environmental context in a dynamic way and continuously, including prior to a new activity or relationship, prior to major decisions or changes in the operation; in response to or anticipation of changes in the operating environment. Regulated financial undertakings providing financial services should identify the adverse impacts at the inception of the contract and before subsequent financial operations, and if notified of possible risks via the procedures in Art.9, during the provision of the service. When identifying and assessing adverse impacts, companies should also identify and assess the impact of a business relationship’s business model and strategies, including purchasing practices.

RemovedRecital 30 a (new): (30a) Where the company cannot prevent, bring to an end or mitigate all the identified and assessed adverse impacts simultaneously, it should be allowed to prioritise the order in which it takes appropriate measures based on the severity and likelihood of the adverse impact and taking into account risk factors, by developing, implementing and regularly reviewing a prioritisation strategy. In line with the relevant international framework, the severity of an adverse impact should be assessed based on the scale, scope and irremediable character of the adverse impact, taking into account the gravity of an adverse impact, including the number of individuals that are or will be affected, the extent to which the environment is or may be damaged or otherwise affected, its irreversibility and the limits on the ability to restore affected individuals or the environment to a situation equivalent to their situation prior to the impact. Once the most severe and adverse impacts are addressed, the company should address less severe and less likely adverse impacts.

RemovedRecital 30 b (new): (30b) Companies should prioritise impacts on the basis of severity and likelihood. The degree of leverage a company has over a business relationship is not relevant to its prioritisation decisions or processes. However, the degree of leverage can influence the appropriate measures that a company chooses to adopt in order to effectively mitigate and/or prevent impacts associated with business partners.

RemovedRecital 31: deleted

RemovedRecital 32: (32) In line with international standards, prevention and mitigation as well as bringing to an end and minimisation of adverse impacts should take into account the interests of those adversely impacted. In order to enable continuous engagement with the value chain business partner instead of termination of business relations (disengagement) and possibly exacerbating adverse impacts, this Directive should ensure that disengagement is a last-resort action, in line with the Union`s policy of zero-tolerance on child labour, the Union’s strategy on rights of the Child and the target date of 2025 proclaimed by the United Nations for the full elimination of child labour worldwide. Terminating a business relationship in which child labour was found could expose the child to even more severe adverse human rights impacts. In the same line, women in precarious labour conditions could face more severe adverse human rights impacts thus increasing their vulnerability. This should therefore be taken into account when deciding on the appropriate action to take, and disengagement should be avoided where the impact of disengagement would be greater than the adverse impact the company is seeking to prevent or mitigate. In situations of state-imposed forced labour, where the adverse impact is organised by political authorities, unhindered engagement with those adversely impacted and mitigation are not possible. This Directive should ensure that companies terminate a business relationship where s…

RemovedRecital 34: (34) So as to comply with the prevention and mitigation obligation under this Directive, companies should be required to take the following appropriate measures, where relevant. Where necessary due to the complexity of prevention measures, companies should develop and implement a prevention action plan. Companies should consider establishing through contractual provisions with a partner with whom they have a business relationship that it will ensure compliance with the code of conduct and, as necessary, a prevention action plan. Partners with whom the company has a business relationship could be asked to seek corresponding contractual provisions from its partners to the extent that their activities are part of the companies’ value chain.

RemovedRecital 34 a (new): (34a) The contractual provisions should not be such as to result in the transfer of responsibility for carrying out due diligence in accordance with this Directive and the liability for failing to do so. Moreover, the contractual provisions should be fair, reasonable and non-discriminatory under the circumstances, and should reflect the joint tasks of parties to conduct due diligence in ongoing cooperation. Companies should also assess whether the business partner can reasonably be expected to comply with those provisions. Often contractual terms are unilaterally imposed on a supplier by a buyer, and any breach thereof is likely to result in unilateral action by the buyer, such as termination or disengagement. Such unilateral action is not appropriate in the context of due diligence and would probably itself result in adverse impacts. In cases where the breach of such contractual provisions gives rise to a potential adverse impact, the company should first take appropriate measures to prevent or adequately mitigate such impacts, rather than considering ending or suspending the contract, in accordance with applicable law. To ensure comprehensive prevention of actual and potential adverse impacts, companies should also make investments which aim to prevent adverse impacts, provide targeted and proportionate financial and administrative support for an SME with which they have a business relationship such as financing, for example, through direct financing, low-interest loans, gu…

RemovedRecital 35: deleted

RemovedRecital 36: (36) In order to ensure that prevention and mitigation of potential adverse impacts is effective, companies should prioritise engagement with business relationships in the value chain, instead of terminating the business relationship, as a last resort action after attempting at preventing and mitigating adverse potential impacts without success. However, the Directive should also, for cases where potential adverse impacts that a company caused or contributed to and that could not be addressed by the described prevention or mitigation measures, and there is no reasonable prospect of change, refer to the obligation for companies to refrain from entering into new or extending existing relations with the partner in question and, where the law governing their relations so entitles them to, as a last resort, in line with responsible disengagement, to either temporarily suspend commercial relationships with the partner in question, while pursuing prevention and mitigation efforts; or to terminate the business relationship with respect to the activities concerned on account of the severity of the potential adverse impact, or if the conditions for temporary suspension are not met. In order to allow companies to fulfil that obligation, Member States should provide for the availability of an option to terminate or suspend the business relationship in contracts governed by their laws. In deciding to terminate or suspend a business relationship, the company should assess whether the adver…

RemovedRecital 37: (37) Industry schemes and multi-stakeholder initiatives can help create additional leverage to identify, mitigate, and prevent adverse impacts. Therefore it should be possible for companies to participate in such initiatives to support aspects of their due diligence, including to coordinate joint leverage, achieve efficiencies, scale up best practices, and seek expertise relevant to specific sectors, geographies, commodities or risk issues. The meaning of initiatives is broad and includes initiatives that support, monitor, evaluate, certify and/or verify aspects of a company’s due diligence, or the due diligence conducted by its subsidiaries and/or business relationships. Such initiatives may be developed and overseen by governments, industry associations, groupings of interested organisations, social partners or civil society organisations, and include monitoring organisations, global framework agreements, sector dialogues and initiatives that certify aspects of due diligence. In order to ensure full information on such initiatives, the Directive should also refer to the possibility for the Commission and the Member States to facilitate the dissemination of information on such schemes or initiatives and their outcomes. The Commission, in collaboration with Member States, the OECD and relevant stakeholders, should issue guidance for assessing the precise scope, alignment with this Directive, and credibility of industry schemes and multi-stakeholder initiatives. Companies part…

RemovedRecital 38: (38) Under the due diligence obligations set out by this Directive, if a company identifies actual human rights and environmental adverse impacts, it should take appropriate measures to bring those to an end. It can be expected that a company is able to bring to an end actual adverse impacts in their own operations and in subsidiaries. However, it should be clarified that where adverse impacts cannot be brought to an end, companies should mitigate the extent of such impacts, whilst pursuing efforts to bring the adverse impact to an end, and implementing a corrective action plan, developed in consultation with affected stakeholders. Minimisation of the extent of adverse impacts should require an outcome that is the closest possible to bringing the adverse impact to an end. To provide companies with legal clarity and certainty, this Directive should define which actions companies should be required to take for bringing actual human rights and environmental adverse impacts to an end and minimisation of their extent, where relevant depending on the circumstances.

RemovedRecital 39: (39) So as to comply with the obligation of bringing to an end and mitigating the extent of actual adverse impacts under this Directive, companies should be required to take the following actions, where relevant. They should neutralise the adverse impact or adequately mitigate its extent by restoring the affected persons, groups and communities and/or the environment back to a situation equivalent or as close as possible to their situation prior to the adverse impact. Where necessary due to the fact that the adverse impact cannot be immediately brought to an end, companies should develop and implement a corrective action plan with reasonable and clearly defined timelines for the implementation of appropriate measures and action and qualitative and quantitative indicators for measuring improvement. Companies could also establish through contractual provisions with a partner with whom they have a business relationship that they will ensure compliance with the code of conduct and, as necessary, a corrective action plan. Partners with whom the company has a business relationship could be asked to establish corresponding reasonable, non-discriminatory and fair contractual provisions with their partners, to the extent that their activities are part of the company’s value chain. The contractual provisions should be accompanied by measures to support carrying out due diligence as outlined in this Directive. Moreover, contractual provisions should be fair, reasonable and non-discrimin…

RemovedRecital 40: deleted

RemovedRecital 41: (41) In order to ensure that bringing actual adverse impacts to an end or minimising them is effective, companies should prioritise engagement with business relationships in the value chain, instead of terminating the business relationship, as a last resort action after attempting at bringing actual adverse impacts to an end or minimising them without success. However, this Directive should also, for cases where actual adverse impacts that a company caused or contributed to could not be brought to an end or adequately mitigated by the described measure, and there is no reasonable prospect of change, refer to the obligation for companies to refrain from entering into new or extending existing relations with the partner in question and, where the law governing their relations so entitles them to, as a last resort, in line with responsible disengagement, to either temporarily suspend commercial relationships with the partner in question, while pursuing efforts to bring to an end or mitigate the adverse impact, or terminate the business relationship with respect to the activities concerned, on account of the severity of the actual adverse impact or if the conditions for temporary suspension are not met. In order to allow companies to fulfil that obligation, Member States should provide for the availability of an option to terminate or suspend the business relationship in contracts governed by their laws. In deciding to terminate or suspend a business relationship, the company sho…

RemovedRecital 41 a (new): (41a) Where a company has caused or contributed to an actual adverse impact, the company should take appropriate measures to remediate that impact. Remedial measures should aim to restore the affected persons and groups or communities and/or the environment to a situation equivalent or as close as possible to their situation prior to the impact, and be developed taking into account the needs and views expressed by affected stakeholders. They may include, but are not limited to, compensation, restitution, rehabilitation, public apologies, reinstatement or cooperation in good faith with investigations. In certain situations, financial compensation may be a necessary way to provide such restoration. Where a company is directly linked to an adverse impact, it should be allowed to voluntarily participate in any remedial measures, where appropriate, and consider using its leverage with responsible parties to enable the remediation of any damage caused by an impact. Member States should ensure that stakeholders affected by an adverse impact should not be required to seek remediation prior to filing claims in court.

RemovedRecital 42: (42) Companies should provide a publicly available and effective notification and non-judicial grievance mechanisms at operational level, that can be used by persons and organisations to notify them of or raise grievances and request remediation in case of legitimate concerns regarding actual or potential human rights, environmental adverse impacts in the value chain. Persons and organisations who could submit such grievances should include persons who are affected or have reasonable grounds to believe that they might be affected and their legitimate representatives, trade unions and other workers’ representatives representing individuals working in the value chain concerned and credible and experienced organisations the purpose of which includes the protection of the environment. Notifications may be submitted by the aforementioned persons and organisations as well as civil society organisations active in the areas related to the value chain concerned where they have knowledge about a potential or actual adverse impact, and legal and natural persons defending human rights and the environment. Companies should establish a procedure for dealing with those notifications and grievances and inform workers, trade unions and other workers’ representatives, where relevant, about such processes. Companies should provide the possibility of submitting notifications and grievances through collaborative arrangements , including industry initiatives, with other companies or organisations,…

RemovedRecital 43: (43) Companies should continuously verify the implementation and monitor the adequacy and effectiveness of their actions taken in accordance with this Directive. They should carry out assessments of their own operations, products and services, those of their subsidiaries and those of their business relationships, to monitor the effectiveness of the identification, prevention, minimisation, bringing to an end, mitigation and remediation of human rights and environmental adverse impacts. Such assessments should verify that adverse impacts are properly identified, due diligence measures are implemented and adverse impacts have actually been prevented or brought to an end. In order to ensure that such assessments are up-to-date, they should be carried out continuously and after a significant change occurs, and be revised continuously if there are reasonable grounds to believe that significant new risks of adverse impact could have arisen. Companies should retain documentation demonstrating their compliance with this requirement for 10 years.

RemovedRecital 44: (44) Like in the existing international standards set by the United Nations Guiding Principles on Business and Human Rights and the OECD framework, it forms part of the due diligence requirement to communicate externally relevant information on due diligence policies, processes and activities conducted to identify and address actual or potential adverse impacts, including the findings and outcomes of those activities. Directive 2013/34/EU as regards corporate sustainability reporting sets out relevant reporting obligations for the companies covered by this directive as well as Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector, for financial undertakings. In order to avoid duplicating reporting obligations, this Directive should therefore not introduce any new reporting obligations in addition to those under Directive 2013/34/EU for the companies covered by that Directive as well as the reporting standards that should be developed under it, nor should it introduce any new reporting obligations in addition to those under Regulation (EU) 2019/2088. As regards companies that are within the scope of this Directive, but do not fall under Directive 2013/34/EU, in order to comply with their obligation of communicating as part of the due diligence under this Directive, they should publish on their website an annual statement that is consistent with those requirements in at least one of the official languages of the Union.

RemovedRecital 44 a (new): (44a) Requirements on companies which are under the scope of this Directive and at the same time are subject to reporting requirements under Articles 19a, 29a and 40a of Directive 2013/34/EU and therefore should report on their due diligence process as stipulated in Articles 19a, 29a and 40a of Directive 2013/34/EU should be understood as a requirement for companies to describe how they implement due diligence as provided for in this Directive. When fulfilling the requirements of Directive 2013/34/EU to report on actions taken to identify potential or actual adverse impacts, companies should explain whether they prioritised the order in which they took appropriate measures, how that approach was applied, and why it was necessary to prioritise. When fulfilling the requirements of Directive 2013/34/EU to report on any actions taken by the undertaking to prevent, mitigate, remediate or bring an end to actual or potential adverse impacts, and the result of such actions, the company should also disclose the number of instances where it decided to disengage, the reason for this disengagement and the location of the concerned business relationships without disclosing their identity.

RemovedRecital 44 b (new): (44b) It is not the objective of this Directive to require companies to publicly disclose intellectual capital, intellectual property, know-how or the results of innovation that would qualify as trade secrets as defined in Directive (EU) 2016/943 of the European Parliament and of the Council. Reporting requirements provided for in this Directive should therefore be without prejudice to Directive (EU) 2016/943. This Directive should also apply without prejudice to Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC.

RemovedRecital 44 c (new): (44c) Companies should take appropriate measures to carry out meaningful engagement with affected stakeholders allowing for genuine interaction and dialogue in their due diligence process. Engagement should cover information and consultation of affected stakeholders and should be comprehensive, structural, effective, timely and culturally and gender responsive. There are situations in which it will not be possible to carry out meaningful engagement with affected stakeholders, or where engagement with additional expert perspectives is useful to allow the company to comply fully with the requirements of this Directive, in particular in the context of scoping and prioritisation decisions. . In these cases companies should engage in meaningful engagement with other relevant stakeholders, such as civil society organisations or legal or natural persons defending human rights or the environment in order to gain credible insights into potential or actual adverse impacts. Consultation should be ongoing and companies should provide comprehensive, targeted and relevant information to affected stakeholders. Affected stakeholders should have the right to request additional written information, which should be provided by the company within a reasonable amount of time and in an appropriate and comprehensive format. Where such a request is refused, affected stakeholders should have the right to a written justification for such refusal. The information and consultation of affected stakeholde…

RemovedRecital 44 d (new): (44d) Strategic lawsuits against public participation are a particular form of harassment brought against natural or legal persons to prevent or penalise speaking up on issues of public interest. Member States should provide necessary safeguards to address those manifestly unfounded claims or abusive court proceedings against public participation in accordance with national and EU legislation.

RemovedRecital 45: (45) In order to give companies tools to help them comply with their due diligence requirements through their value chain, the Commission, in consultation with Member States and relevant stakeholders, should provide guidance on model contractual clauses, which can be used voluntarily by companies as a tool to help fulfil their obligations in Articles 7 and 8. Such contractual clauses should stipulate, as a minimum, a clear allocation of tasks between contracting parties in ongoing cooperation, that they can not result in the transfer of responsibility for carrying out due diligence, and that, when such clauses are breached, companies should avoid terminating such clauses by first taking appropriate measures in line with Articles 7 and 8 of this Directive. The guidance should further clarify that the simple inclusion of contractual assurances cannot, on its own, satisfy the due diligence standards of this Directive. Such standards should only be satisfied if due diligence obligations are assigned to others in a diligent manner that ensures the effective performance of those obligations and includes measures appropriate to the circumstances, such as monitoring, financial and non-financial assistance, and responsible purchasing practices.

RemovedRecital 46: (46) In order to provide support and practical tools to companies or to Member State authorities on how companies should fulfil their due diligence obligations, the Commission, using relevant international guidelines and standards as a reference, and in consultation with Member States, the European cross-industry and sectoral social partners and other relevant stakeholders, including civil society organisations, the European Union Agency for Fundamental Rights, the European Environment Agency, the European Labour Authority, the European External Action Service, the European Innovation Council and the Small and Medium-Sized Enterprises Executive Agency (EISMEA), the European Food Safety Authority, and where appropriate the OECD and other international bodies having expertise in due diligence, should issue clear and easily understandable guidelines, including general and sector specific guidance, in order to facilitate compliance in a practical manner.

RemovedRecital 46 a (new): (46a) In order to support companies fulfilling their due diligence obligations along their value chain, the European Commission should conduct further research on digital tools and promote them.

RemovedRecital 47: (47) Although SMEs are not included in the scope of this Directive, they could be impacted by its provisions as contractors or subcontractors to the companies which are in the scope. The aim is nevertheless to mitigate financial or administrative burden on SMEs, many of which are already struggling in the context of the global economic and sanitary crisis. In order to support SMEs, Member States, with the support of the Commission, should set up and operate, either individually or jointly, dedicated user-friendly websites, portals or platforms, and Member States should also financially support SMEs and help them build capacity. Such support should also be made accessible, and where necessary adapted and extended to upstream economic operators in third countries. Companies whose business partner is an SME, are also encouraged to support them to comply with due diligence measures and use fair, reasonable, non-discriminatory and proportionate requirements vis-a-vis the SMEs. SMEs should also have the possibility to apply this Directive on a voluntary basis and should for that purpose be supported through adequate measures and tools, and be incentivised.

RemovedRecital 48: (48) In order to complement Member State support to companies in their implementation, including SMEs, the Commission should build on existing EU tools, projects and other actions helping with the due diligence implementation in the EU and in third countries. It should set up new support measures that provide help to companies, including SMEs on due diligence requirements, including an observatory for value chain transparency and the facilitation of joint stakeholder initiatives.

RemovedRecital 49: (49) The Commission and Member States should continue to work in partnership with third countries to support upstream economic operators build the capacity to effectively prevent and mitigate adverse human rights and environmental impacts of their operations and business relationships, paying specific attention to the challenges faced by smallholders. They should use their neighbourhood, development and international cooperation instruments, including Free Trade Agreements, to support third country governments and upstream economic operators in third countries addressing adverse human rights and environmental impacts of their operations and upstream business relationships. This could include working with partner country governments, the local private sector and stakeholders on addressing the root causes of adverse human rights and environmental impacts.

RemovedRecital 50: (50) In order to ensure that this Directive effectively contributes to combating climate change, companies should in consultation with stakeholders adopt and implement a transition plan in line with the reporting requirements in Article 19a of Directive (EU) 2022/2464 (CSRD) to ensure that the business model and strategy of the company are aligned with the objectives of the transition to a sustainable economy and with the limiting of global warming to 1.5 °C in line with the Paris Agreement, as well as the objective of achieving climate neutrality by 2050 as established in Regulation (EU) 2021/1119 (European Climate Law), and the 2030 climate target. The plan should take into account the value chain and include time-bound targets related to their climate objectives for scope 1, 2 and, where relevant, 3 emissions, including, where appropriate, absolute emission reduction targets for greenhouse gas including, where relevant, methane emissions, for 2030 and in five-year steps up to 2050 based on conclusive scientific evidence, except where a company can demonstrate that its operations and value chain do not cause greenhouse gas emissions and that such emission reduction targets would therefore not be appropriate. The plans should develop implementing actions to achieve the company’s climate targets and be based on conclusive scientific evidence, meaning evidence with independent scientific validation that is consistent with the limiting of global warming to 1.5°C as defined by t…

RemovedRecital 51: (51) Transition plans should include clear obligations for directors and board members to ensure that environmental and climate risks and impacts are addressed in the company’s strategy. With a view to increasing the financial incentives of directors, companies with more than 1000 employees on average should have a relevant and effective policy in place to ensure that a part of the directors’ variable remuneration is linked to the achievement of the targets of the company’s transition plan for combating climate change.

RemovedRecital 53: (53) In order to ensure the monitoring of the correct implementation of companies’ due diligence obligations and ensure the proper enforcement of this Directive, Member States should designate one or more national supervisory authorities. These supervisory authorities should be of a public nature, independent from the companies falling within the scope of this Directive or other market interests, and free of conflicts of interest. In accordance with national law, Member States should ensure appropriate financing of the competent authority. They should be entitled to carry out investigations, including, where appropriate, on-site inspections and hearing of relevant stakeholders, on their own initiative or based on grievances or substantiated concerns raised under this Directive. Where competent authorities under sectoral legislation exist, Member States could identify those as responsible for the application of this Directive in their areas of competence. They could designate authorities for the supervision of regulated financial undertaking also as supervisory authorities for the purposes of this Directive. Member States, when designating supervisory authorities and defining the procedures by which they operate, should ensure coordination and complementarity with other processes available under other international instruments, such as the non-judicial grievance mechanism operated by National Contact Points.

RemovedRecital 54: (54) In order to ensure effective enforcement of national measures implementing this Directive, Member States should provide for dissuasive, proportionate and effective sanctions for infringements of those measures. In order for such sanction regime to be effective, administrative sanctions to be imposed by the national supervisory authorities should include pecuniary sanctions, a public statement indicating that the company is responsible and the nature of the infringement, obligations to perform an action including ceasing the conduct constituting the infringement and desisting from any repetition of that conduct, and suspension of products from free circulation or export. Where the legal system of a Member State does not provide for administrative sanctions as foreseen in this Directive, the rules on administrative sanctions should be applied in such a way that the sanction is initiated by the competent supervisory authority and imposed by the judicial authority. Therefore, it is necessary that those Member States ensure that the application of the rules and sanctions has an equivalent effect to the administrative sanctions imposed by the competent supervisory authorities.

RemovedRecital 54 a (new): (54a) In order to prevent an artificial reduction of potential administrative fines resulting from an ultimate parent company shifting its net worldwide turnover to third entities, Member States should ensure that, with regards to companies referred to in Articles 2(1)(b) and 2(2)(b), administrative pecuniary sanctions are calculated taking into account the consolidated turnover reported by that company.

RemovedRecital 54 b (new): (54b) Under Article 18(2) of Directive 2014/24/EU, Article 36(2) of Directive 2014/25/EU and Article 30(3) of Directive 2014/23/EU, Member States are required to take appropriate measures to ensure compliance with obligations under Union law with regards to procurement and concession contracts. Therefore the Commission should assess whether it is relevant to review these directives to further specify the requirements and measures Member States are to adopt to ensure compliance with the sustainability and due diligence obligations under this Directive throughout procurement and concession processes, from selection to performance of the contract.

RemovedRecital 56: (56) In order to ensure effective compensation of victims of adverse impacts, Member States should be required to lay down rules governing the civil liability of companies for damages arising due to its failure to comply with the due diligence process. The company should be liable for damages if they failed to comply with the obligations to prevent and mitigate potential adverse impacts or to bring actual impacts to an end and mitigate them , or provide remediation, and as a result of this failure the company caused or contributed to an adverse impact that should have been identified, prioritised, prevented, mitigated,, brought to an end, remediated or its extent minimised through the appropriate measures, and led to damage. Member States should also make sure that , in case there is no legal successor, the mother companies can be held liable for their subsidiary where the subsidiary is under the scope of this Directive or was at the time of the impact and has been dissolved by the parent company or has dissolved itself intentionally in order to avoid liability, irrespective of any cooperation with the parent company in conducting due diligence.

RemovedRecital 57: (57) In the assessment of the existence and extent of liability, due account should be taken of the company’s efforts, insofar as they relate directly to the damage in question, to take remedial action, including that required of them by a supervisory authority, any investments made and any targeted support provided as well as any collaboration with affected stakeholders and other entities to address adverse impacts in its value chains.

RemovedRecital 57 a (new): (57a) Moreover, the possibility for a company to prioritise, when necessary, should be taken into consideration for its potential liability under Article 22. Provided that the prioritisation was done faithfully with regard to the severity and likelihood of the adverse impact, a company should not be held liable if an adverse impact arises from an activity or operation that was legitimately not prioritised.

RemovedRecital 58: (58) The liability regime does not regulate who should prove that the company’s action was reasonably adequate under the circumstances of the case, however Member States may foresee in their national law that where a claimant provides prima facie elements substantiating the likelihood of the defendant’s liability, the defendant is held liable, unless it can prove that it has complied with its obligations under this Directive.

RemovedRecital 59: (59) As regards civil liability rules, the civil liability of a company for damages that it has caused or contributed to arising due to its failure to carry out adequate due diligence should be without prejudice to civil liability of its subsidiaries or the respective civil liability of direct and indirect business partners in the value chain. Also, the civil liability rules under this Directive should not limit companies’ liability under Union or national legal systems, including rules on joint and several liability.

RemovedRecital 59 a (new): (59a) The right to an effective remedy is an internationally recognised human right, enshrined in Article 8 of the Universal Declaration of Human Rights, Article 9(3) of the Aarhus Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters and Article 2(3)of the International Covenant on Civil and Political Rights, and is also a fundamental right of the Union within the meaning of Article 47 of the Charter. Delays and difficulties in accessing evidence, as well as gender disparity, geographical location, vulnerabilities and marginalisation can constitute major practical and procedural obstacles for the persons concerned, hindering their access to an effective remedy without fear of reprisals. Member States should thus ensure that victims have access to an effective remedy and that the costs and the length of the proceedings do not prevent them from access to courts. These measures may, for example, take the form of public funding, including structural support for victims of actual and potential adverse impacts, limitation of applicable court or administrative fees, or access to legal aid.

RemovedRecital 59 b (new): (59b) Mandated trade unions, civil society organisations or other relevant actors acting in the public interest, such as National Human Rights Institutions or an Ombudsman, should be able to bring actions before their courts on behalf of a victim or group of victims of adverse impacts, and should have the rights and obligations of a claimant party in the proceedings, without prejudice to existing national law.

RemovedRecital 59 c (new): (59c) Limitation periods for bringing civil liability claims for damages should be at least ten years. When setting the starting point of such limitation periods, Member States should consider taking into account the moment the impact causing the damage has ceased and when the victim concerned knew or could be reasonable expected to have known that the damage they suffered was caused by the adverse impact.

RemovedRecital 65 a (new): (65a) Human rights and environmental rights defenders are on the front line of the consequences of adverse environmental and human rights impacts worldwide and in the EU, and have been threatened, intimidated, persecuted, harassed or even murdered. Companies should therefore not expose them to any kind of violence.

RemovedRecital 69: (69) This Directive is without prejudice to obligations in the areas of human rights, protection of the environment and climate change under other Union legislative acts. If the provisions of this Directive conflict with a provision of another Union legislative act pursuing the same objectives and providing for more extensive or more specific obligations, the provisions of the other Union legislative act should prevail to the extent of the conflict and shall apply to those specific obligations, in those cases where the obligations set out in another legislative act apply to a more specific sector or subject matter. Such acts include, but are not limited to existing as well as future EU legislation regarding timber and deforestation, posting of workers and forced labour.

RemovedRecital 70: (70) The Commission should assess and report whether the scope of the Directive should be lowered, in particular for certain sectors, in order to align it to guidance from the Organisation for Economic Cooperation and Development or in light of clear data or evidence on labour exploitation, human rights violations or newly emerging environmental threats, including data from the EBRD, ILO or FRA.

RemovedArticle 1 – paragraph 1 – subparagraph 1 – point a: (a) on obligations for companies regarding actual and potential human rights adverse impacts and environmental adverse impacts that they caused, contributed to or are directly linked to, with respect to their own operations, and those of their subsidiaries, and the operations carried out by entities in their value chain with whom the company has a business relationship and

RemovedArticle 1 – paragraph 1 – subparagraph 1 – point b: (b) on liability for violations of the obligations mentioned above which led to damage;

RemovedArticle 1 – paragraph 1 – subparagraph 2: deleted

RemovedArticle 1 – paragraph 2: 2. This Directive shall not constitute grounds for reducing the level of protection of human rights, including employment and social rights as stipulated in existing Union and national legislation, the environment or the climate provided for by the Member States or by applicable collective agreements, at the time of the adoption of this Directive.

RemovedArticle 2 – paragraph 1 – point a: (a) The company had more than 250 employees on average and had a net worldwide turnover of more than EUR 40 million in the last financial year for which annual financial statements have been prepared;

RemovedArticle 2 – paragraph 1 – point b – introductory part: (b) the company did not reach the thresholds under (a) but is the ultimate parent company of a group that had 500 employees and a net worldwide turnover of more than 150 million in the last financial year for which annual financial statements have been prepared.

RemovedArticle 2 – paragraph 1 – point b – point i: deleted

RemovedArticle 2 – paragraph 1 – point b – point ii: deleted

RemovedArticle 2 – paragraph 1 – point b – point iii: deleted

RemovedArticle 2 – paragraph 2 – point a: (a) the company generated a net worldwide turnover of more than EUR 150 million, provided that at least EUR 40 million was generated in the Union in the financial year preceding the last financial year, including turnover generated by third party companies with whom the company and/or its subsidiaries has entered into a vertical agreement in the Union in return for royalties;

RemovedArticle 2 – paragraph 2 – point b: (b) the company did not reach the thresholds under (a) but is the ultimate parent company of a group that had 500 employees and a net worldwide turnover of more than 150 million and at least 40 million was generated in the Union in the last financial year for which annual financial statements have been prepared, including turnover generated by third party companies with whom the company and/or its subsidiaries has entered into a vertical agreement in the Union in return for royalties.

RemovedArticle 2 – paragraph 3: 3. For the purposes of paragraph 1, the number of part-time employees shall be calculated on a full-time equivalent basis. Temporary agency workers and other workers in non-standard forms of employment shall be included in the calculation of the number of employees in the same way as if they were workers employed directly for the same period of time by the company.

RemovedArticle 3 – paragraph 1 – introductory part: 1. For the purpose of this Directive, the following definitions shall apply:

RemovedArticle 3 – paragraph 1 – point a – point i: (i) a legal person constituted as one of the legal forms listed in Annex I and Annex II to Directive 2013/34/EU of the European Parliament and of the Council110;

RemovedArticle 3 – paragraph 1 – point a – point iii: deleted

RemovedArticle 3 – paragraph 1 – point a – point iv – indent 8: deleted / (deleted) / (deleted)

RemovedArticle 3 – paragraph 1 – point a – point iv – indent 9: deleted

RemovedArticle 3 – paragraph 1 – point a – point iv – indent 10: deleted

RemovedArticle 3 – paragraph 1 – point a a (new): (aa) 'investee company' means a company in which an institutional investor or asset manager invests which cannot be considered as a controlled undertaking;

RemovedArticle 3 – paragraph 1 – point a b (new): (ab) 'institutional investor' means an entity as defined by Article 2(e) of Directive 2007/36/EC, within the scope of Article 2 of this Directive;

RemovedArticle 3 – paragraph 1 – point a c (new): (ac) 'asset manager' means an entity as defined by Article 2(f) of Directive 2007/36/EC, within the scope of Article 2 of this Directive;

RemovedArticle 3 – paragraph 1 – point b: (b) ‘adverse environmental impact’ means an adverse impact on the environment resulting from the failure to comply with obligations in line with the relevant provisions of the instruments listed in Part I, points 18 and 19, of the Annex and Part II of the Annex, taking into account, where available, the national legislation and measures linked to those provisions related to the international texts listed in Part I, points 18 and 19, of the Annex and Part II of the Annex;

RemovedArticle 3 – paragraph 1 – point c: (c) ‘adverse human rights impact’ means an adverse impact on persons resulting from any action which removes or reduces the ability of an individual or group to enjoy the rights or to be protected by prohibitions enshrined in international conventions and instruments listed in the Annex, Part I, Section 1 and Annex, Part I, Section 2;

RemovedArticle 3 – paragraph 1 – point c a (new): (ca) ‘adverse impact’ means any potential or actual adverse human rights or adverse environmental impact;

RemovedArticle 3 – paragraph 1 – point d: (d) ‘subsidiary’ means a legal person as defined in Article 2, point (10), of Directive 2013/34/EU and a legal person through which the activity of a ‘controlled undertaking’ as defined in Article 2(1), point (f), of Directive 2004/109/EC of the European Parliament and of the Council 128 is exercised;

RemovedArticle 3 – paragraph 1 – point e – introductory part: (e) ‘business relationship’ means a direct or indirect relationship of a company with a contractor, subcontractor, or other entities in its value chain:

RemovedArticle 3 – paragraph 1 – point e – point i: (i) with whom the company has a commercial agreement or to whom the company provides financial services;

RemovedArticle 3 – paragraph 1 – point e – point ii: (ii) that performs activities related to the products or services of the company;

RemovedArticle 3 – paragraph 1 – point f: deleted

RemovedArticle 3 – paragraph 1 – point g: (g) ‘value chain’ means:

RemovedAmendments 115 and 422cp2

RemovedArticle 3 – paragraph 1 – point g – point i (new)

RemovedAmendment: (i) activities related to, and entities involved in, the production, design, sourcing, extraction, manufacture, transport, storage and supply of raw materials, products or parts of a company’s product and the development of a company’s product or the development or provision of a service, and

RemovedArticle 3 – paragraph 1 – point g – point ii (new): (ii) activities related to, and entities involved in, the sale, distribution, transport, storage, and waste management of a company’s products or the provision of services, and excluding the waste management of the product by individual consumers.

RemovedArticle 3 – paragraph 1 – point g – subparagraph 1 a (new): As regards companies within the meaning of point (a)(iv), ‘value chain’ with respect to the provision of these specific services shall include the activities of the clients directly receiving such financial services provided by financial undertakings pursuant to point (iv) and of other companies belonging to the same group whose activities are linked to the contract in question. The value chain of regulated financial undertakings within the meaning of point (a)-(iv) does not cover households and natural persons or SMEs;

RemovedArticle 3 – paragraph 1 – point h: (h) ‘independent third-party verification’ means verification of aspects of the due diligence of a company or parts of its value chain resulting from the provisions of this Directive either by an auditor or an audit firm that is approved in accordance with Article 3 of Directive 2006/43/EC or accredited in a Member State for conducting certifications, or by an independent assurance services provider as defined in Article 2, point (23), of Directive 2006/43/EC accredited in a Member State in accordance with Regulation (EC) No 765/2008 of the European Parliament and of the Council for the specific conformity assessment activity referred to in Article 14(4a) or by an independent third party that is accredited in a Member State for conducting certifications and which is independent from the company, free from any conflicts of interests, has demonstrated experience, expertise and competence in environmental, climate, and human rights matters, and is accountable for the quality and reliability of the audit or assessment, and meets the minimum standards set out in the delegated act as described in Article 14(4a);

RemovedArticle 3 – paragraph 1 – point j: (j) ‘industry or multi-stakeholder initiative’ means an initiative that companies participate in, which provides standards, procedures, tools and/or mechanisms, in order to support, monitor, evaluate, certify, and/or verify aspects of their due diligence, or the due diligence conducted by their subsidiaries and/or business relationships. Such initiatives may be developed and overseen by governments, industry associations, groupings of interested organisations, or civil society organisations;

RemovedArticle 3 – paragraph 1 – point l: deleted

RemovedArticle 3 – paragraph 1 – point n: (n) ‘affected stakeholders’ means those individuals, groups or communities that have rights or legitimate interests that are affected or could be affected by the adverse impacts stemming from a company’s activities or actions or the activities or actions of entities in its value chain, and the legitimate representatives of such individuals or groups, including the workers and their representatives and the trade unions of the company, of its subsidiaries and throughout its value chain, or in cases where there are no individuals, groups or communities affected by an adverse impact on the environment, credible and experienced organisations whose purpose includes the protection of the environment;

RemovedArticle 3 – paragraph 1 – point n a (new): (na) ‘vulnerable stakeholders’ means affected stakeholders that find themselves in marginalised situations and situations of vulnerability, due to specific contexts or intersecting factors, including among others, sex, gender, age, race, ethnicity, class, caste, education, indigenous peoples, migration status, disability, as well as social and economic status, and includes stakeholders living in conflict-affected and high risk areas, which are the causes of diverse and often disproportionate adverse impacts, and create discrimination and additional barriers to participation and access to justice;

RemovedArticle 3 – paragraph 1 – point q: (q) ‘appropriate measures’ means measures that are capable of achieving the objectives of due diligence and effectively addressing the adverse impact identified pursuant to Article 6 in a manner proportionate and commensurate to the degree of severity and the likelihood of the adverse impact, and proportionate and commensurate to the size, resources and capacities of the company. This shall take into account the circumstances of the specific case, including the nature of the adverse impact, characteristics of the economic sector, the nature of the company’s specific activities, products and services, the specific business relationship;

RemovedArticle 3 – paragraph 1 – point q a (new): (qa) 'leverage' means the ability to affect change in the practices of the entity causing or contributing to the adverse impact;

RemovedArticle 3 – paragraph 1 – point q b (new): (qb) “to cause an adverse impact’ means that the company’s activities on their own are sufficient to result in an adverse impact;

RemovedArticle 3 – paragraph 1 – point q c (new): (qc) ‘to contribute to an adverse impact’ means that a company's own activities, in combination with the activities of other entities, cause an impact, or that the activities of the company cause, facilitate or incentivise another entity to cause an adverse impact. The contribution must be substantial, meaning that it does not include minor or trivial contributions. Assessing the substantial nature of the contribution and understanding when the actions of the company may have caused, facilitated or incentivised another entity to cause an adverse impact can involve the consideration of multiple factors. The following factors can be taken into account: / – the extent to which a company may encourage or motivate an adverse impact by another entity, i.e. the degree to which the activity increased the risk of the impact occurring, / – the extent to which a company could or should have known about the adverse impact or potential for adverse impact, i.e. the degree of foreseeability, / – the degree to which any of the company's activities actually mitigated the adverse impact or decreased the risk of the impact occurring. / The mere existence of a business relationship or activities which create the general conditions in which it is possible for adverse impacts to occur does not in itself constitute a relationship of contribution. The activity in question should substantially increase the risk of adverse impact;

RemovedArticle 3 – paragraph 1 – point q d (new): (qd) being ‘directly linked to an adverse impact’ means that there is a relationship between the adverse impact and the company’s products, services or operations through another business relationship and where the company has neither caused nor contributed to the impact. Directly linked is not defined by a direct business relationship. Also, a direct linkage does not imply that the responsibility shifts from the business relationship causing an adverse impact to the company with which it has a linkage;

RemovedArticle 3 – paragraph 1 – point q e (new): (qe) ‘risk-based’ means proportionate to the likelihood and severity of potential adverse impacts;

RemovedArticle 3 – paragraph 1 – point q f (new): (qf) ‘risk factors’ means company-level risk factors, business model risk factors, geographic risk factors, product and service risk factors and sectoral risk factors;

RemovedArticle 3 – paragraph 1 – point q g (new): (qg) ‘severity of an adverse impact’ means the scale, scope and irremediable character of the adverse impact, taking into account the gravity of an adverse impact, including the number of individuals that are or will be affected, the extent to which the environment is or may be damaged or otherwise affected, its irreversibility and the limits on the ability to restore affected individuals or the environment to a situation equivalent to their situation prior to the impact.

RemovedArticle 3 – paragraph 1 a (new): 1a. The Commission shall be empowered to adopt delegated acts in accordance with Article 28 to amend the Annex, in order to make sure that it remains consistent with the Union’s objectives on human rights and the environment.

RemovedArticle 3 a (new): Article 3a / Single market clause / 1. The Commission and the Member States shall coordinate during the transposition of this Directive and thereafter in view of a full level of harmonisation between Member States, in order to ensure a level playing field for companies and to prevent the fragmentation of the Single Market. / 2. The Commission shall consider, six years after the entry into force of this Directive, whether changes to the level of harmonisation of this Directive are required to ensure a level-playing field for companies in the Single Market, including whether the provisions of this Directive could be converted into a Regulation.

RemovedArticle 4 – paragraph 1 – introductory part: 1. Member States shall ensure that companies conduct risk-based human rights and environmental due diligence as laid down in Articles 5 to 11 (‘due diligence’) by carrying out the following actions:

RemovedArticle 4 – paragraph 1 – point c a (new): (ca) where necessary, prioritising potential and actual adverse impacts in accordance with Article 8b;

RemovedArticle 4 – paragraph 1 – point c b (new): (cb) remedying actual adverse impacts in accordance with Article 8c;

RemovedArticle 4 – paragraph 1 – point d: (d) establishing or participating in a notification and non-judicial grievance mechanism in accordance with Article 9;

RemovedArticle 4 – paragraph 1 – point e: (e) monitoring and verifying the effectiveness of their due diligence policy and measures in accordance with Article 10;

RemovedArticle 4 – paragraph 1 – point f a (new): (fa) consulting and engaging with affected stakeholders in a meaningful way in accordance with Article 8d.

RemovedArticle 4 – paragraph 2 a (new): 2a. Companies shall retain documentation demonstrating their compliance with this Directive for at least 10 years.

RemovedArticle 4 a (new): Article 4a / Due diligence support at group level / 1. Member States shall ensure that parent companies may perform actions which can contribute to their subsidiaries falling under the scope of this Directive meet their obligations set out in Articles 5 to 11 and Article 15. This is without prejudice to the civil liability of subsidiaries in accordance with Article 22. / 2. The parent company may perform actions which contribute to fulfilling the due diligence obligations by the subsidiary company in accordance with paragraph 1, subject to all the following conditions: / (a) the subsidiary provides all the relevant and necessary information to its parent company and cooperates with it; / (b) the subsidiary abides by its parent company's due diligence policy; / (c) the parent company accordingly adapts its due diligence policy to ensure that the obligations laid down in Article 5(1) are fulfilled with respect to the subsidiary; / (d) the subsidiary integrates due diligence into all its policies and risk management systems in accordance with Article 5; / (e) where necessary, the subsidiary continues to take appropriate measures in accordance with Articles 7 and 8, as well as continues to perform its obligations under Articles 8a, 8b and 8d; / (f) where the parent company performs specific actions on behalf of the subsidiary, both the parent company and subsidiary clearly and transparently communicate so towards relevant stakeholders and the public domain; / (g) the subsidiary i…

RemovedArticle 5 – paragraph 1 – introductory part: 1. Member States shall ensure that companies integrate due diligence into their relevant corporate policies and have in place a due diligence policy. The due diligence policy shall contain all of the following:

RemovedArticle 5 – paragraph 1 – point -a (new): (-a) a description of the potential or actual adverse impacts identified by the company in line with Article 6;

RemovedArticle 5 – paragraph 1 – point a: (a) a description of the company’s approach to due diligence, including in the short, medium and long term;

RemovedArticle 5 – paragraph 1 – point b: (b) a code of conduct defining rules and principles and measures to be followed and implemented where relevant throughout the company and its subsidiaries across all operations. The code of conduct shall be designed to ensure that the company respects human rights and the environment, and it shall be aligned with the fundamental values of the Union;

RemovedArticle 5 – paragraph 1 – point c: (c) a description of the processes put in place and appropriate measures taken to implement due diligence in line with Articles 7 and 8 in the value chain, including the relevant measures taken to incorporate due diligence into its own business model, employment and purchasing practices with entities with which the company has a business relationship and measures taken to monitor and verify due diligence activities.

RemovedArticle 5 – paragraph 2: 2. Member States shall ensure that the companies continuously review their due diligence policy and update it when significant changes occur.

RemovedArticle 5 – paragraph 2 a (new): 2a. Companies shall carry out a due diligence policy which is proportionate and commensurate to the likelihood and severity of their potential adverse impacts and the severity of their actual adverse impacts, as well as their specific circumstances and risk factors, particularly their sector and location of activity, the size and length of their value chain, the size of the company, its capacity, resources and leverage.

RemovedArticle 5 – paragraph 2 b (new): 2b. When companies operate in areas in a state of armed conflict or fragile post-conflict, areas under occupation and/or annexation, as well as areas witnessing weak or non-existent governance and security, such as failed states, Member States shall ensure that they respect obligations under international humanitarian law and conduct heightened, conflict-sensitive due diligence on their operations and business relations through integrating into their due diligence, a conflict analysis based on meaningful and conflict-sensitive stakeholders’ engagement, of the root causes, triggers and parties driving the conflict, and of the impact of the company’s activities on the conflict.

RemovedArticle 6 – title: Identifying and assessing actual and potential adverse impacts

RemovedArticle 6 – paragraph 1: 1. Member States shall ensure that companies take appropriate measures to broadly scope the impacts of their operations, subsidiaries and business relationships in order to identify and assess actual and potential adverse human rights and environmental impacts arising from their own operations, products and services or those of their subsidiaries and those related to their value chains, and whether they cause or contribute to or are directly linked to those impacts.

RemovedArticle 6 – paragraph 2: 2. Member States shall ensure that, as part of their due diligence process, companies shall: / (a) identify where adverse impacts are most likely to occur and to be severe, including by identifying individual higher risk operations, subsidiaries and business relationships which should be prioritised taking into account relevant risk factors; and / (b) carry out in-depth assessments of prioritised operations, subsidiaries and business relationships in order to determine the nature and extent of specific actual and potential adverse impacts.

RemovedArticle 6 – paragraph 2 a (new): 2 a. In identifying individual higher risk business relationships, relevant company-level risk factors shall include whether the business relationship is a company covered by this Directive.

RemovedArticle 6 – paragraph 3: 3. When companies referred to in Article 3, point (a)(iv), provide financial services, identification of actual and potential adverse human rights impacts and adverse environmental impacts shall be carried out before providing that service and before subsequent financial operations, and, if notified of possible risks by means of the procedures referred to in Article 9, during the provision of the service.

RemovedArticle 6 – paragraph 4: 4. Member States shall ensure that, for the purposes of identifying and assessing adverse impacts based on, where appropriate, quantitative and qualitative information, including the relevant disaggregated data that can be reasonably obtained by a company, companies shall make use of appropriate methods and resources, including public reports, independent reports and information gathered through the notification and non-judicial grievance mechanism provided for in Article 9. Companies shall also carry out meaningful engagement in accordance with Article 8d with potentially affected stakeholders including workers and other relevant stakeholders to gather information on as well as to identify and assess actual or potential adverse impacts.

RemovedArticle 6 – paragraph 4 a (new): 4a. In the event that not all the necessary information regarding its value chain is available, the company shall explain the efforts made to obtain the necessary information about its value chain, the reasons why not all of the necessary information could be obtained, and its plans to obtain the necessary information in the future.

RemovedArticle 7 – paragraph 1: 1. Member States shall ensure that companies take appropriate measures to prevent, or where prevention is not possible or not immediately possible or has failed, adequately mitigate potential adverse human rights impacts and adverse environmental impacts, that have been, or should have been, identified pursuant to Article 6, in accordance with this Article.

RemovedArticle 7 – paragraph 1 a (new): 1a. For the purposes of this Article, in cases where a company may cause a potential adverse impact, appropriate measures shall be understood as measures which aim to prevent or mitigate a potential adverse impact. In cases where a company may contribute to an adverse impact, appropriate measures shall be understood as measures which aim to prevent or mitigate the contribution to the impact, using or increasing the company’s leverage with other responsible parties to prevent or mitigate the potential adverse impact. In cases where a company’s operations, products or services may be directly linked to an adverse impact through its business relationships with other entities, appropriate measures shall be understood as measures which aim to use or increase the company’s leverage with responsible parties to seek to prevent or mitigate the potential adverse impact and to influence the entity causing the impact.

RemovedArticle 7 – paragraph 1 b (new): 1b. For the purposes of this Article, it shall be presumed that financial undertakings are directly linked to an adverse impact in their value chain without causing or contributing to it.

RemovedArticle 7 – paragraph 2 – introductory part: 2. Companies shall be required to take appropriate measures, including the following actions, where relevant:

RemovedArticle 7 – paragraph 2 – point a: (a) where necessary due to the nature or complexity of the measures required for prevention, develop and implement a prevention action plan, with a reasonable and clearly defined timeline for the implementation of appropriate measures and action, and qualitative and quantitative indicators for measuring improvement. The prevention action plan shall be applicable and accurately tailored to the context of companies’ operations and value chain. The development and implementation of a climate transition plan according to Article 15 shall be considered an appropriate measure to prevent environmental adverse impacts related to climate change mitigation pursuant to paragraph 1 of this Article;

RemovedArticle 7 – paragraph 2 – point b: (b) consider establishing through contractual provisions with a partner with whom it has a business relationship that it will ensure compliance with the company’s code of conduct and, as necessary, a prevention action plan. Partners with whom the company has a business relationship could be asked to establish corresponding reasonable, non-discriminatory and fair contractual provisions with their partners, to the extent that their activities are part of the company’s value chain. When such contractual assurances are obtained, paragraph 4 shall apply;

RemovedArticle 7 – paragraph 2 – point c: (c) make necessary modifications, improvements to, withdrawals of or investments in, the company’s own operations, such as into management, production or other operational processes, facilities, products and product traceability, projects, services and skills;

RemovedArticle 7 – paragraph 2 – point c a (new): (ca) adapt business models and strategies, including purchasing practices, including those which contribute to living wages and incomes for their suppliers, in order to prevent potential adverse impacts, and develop and use purchase policies that do not encourage potential adverse impacts on human rights or the environment;

RemovedArticle 7 – paragraph 2 – point d: (d) provide targeted and proportionate financial and administrative support for an SME with which the company has a business relationship;

RemovedArticle 7 – paragraph 2 – point d a (new): (da) engage with a business relationship about the company’s expectations with regard to preventing and mitigating the potential adverse impacts, including by providing or enabling access to capacity-building, guidance, administrative and financial support such as loans or financing, taking into consideration the resources, knowledge and constraints of the business partner;

RemovedArticle 7 – paragraph 2 – point e: (e) in compliance with Union law including competition law, collaborate with other entities, including to increase the company’s ability to bring the adverse impact to an end, in particular where no other action is suitable or effective.

RemovedArticle 7 – paragraph 2 – point e a (new): (ea) when there is a direct linkage to impacts occurring in business relationships with other companies operating in the Union, appropriate measures can include notifying the relevant supervisory authority while continuing to make reasonable efforts to seek to prevent or mitigate the impact.

RemovedArticle 7 – paragraph 2 a (new): 2a. When distributing or selling a product or providing a service, companies shall take appropriate measures to ensure that the composition, design and commercialisation of a product or service is in line with Union law and does not lead to adverse impacts, be it individual or collective. In this regard, particular attention shall be paid to potential adverse impact on children.

RemovedArticle 7 – paragraph 3: deleted

RemovedArticle 7 – paragraph 4 – subparagraph 1: The contractual provisions shall be accompanied by measures to support carrying out due diligence.

RemovedArticle 7 – paragraph 4 – subparagraph 2: When provisions, including contractual, are established, or a contract is entered into, with a business relationship, the terms used shall be fair, reasonable and non-discriminatory. Where measures to verify compliance are carried out in relation to SMEs, the company shall bear the cost of the independent third-party verification. At the request of the SME, they shall cover the costs in full or shall share them with the company. SMEs may share the results of verifications carried out in relation to themselves with multiple companies. / The contractual provisions sought in accordance with paragraph 2 shall not be such as to result in the transfer of responsibility for carrying out due diligence in accordance with this Directive and of the liability for failing to do so. / In seeking such contractual provisions, companies shall assess whether the business partner can reasonably be expected to comply with those provisions.

RemovedArticle 7 – paragraph 5 – subparagraph 1 – introductory part: As regards potential adverse impacts within the meaning of paragraph 1 that a company caused or contributed to and that could not be prevented or adequately mitigated, and where there is no reasonable prospect of change, the company shall be required to refrain from entering into new or extending existing relations with the partner in connection with or in the value chain of which the impact has arisen, and shall, where the law governing their relations so entitles them to, take the following actions as a last resort, in line with responsible disengagement:

RemovedArticle 7 – paragraph 5 – subparagraph 1 – point a: (a) temporarily suspend commercial relations with the partner in question, while pursuing prevention and mitigation efforts;

RemovedArticle 7 – paragraph 5 – subparagraph 1 – point b: (b) terminate the business relationship with respect to the activities concerned, on account of the severity of the potential adverse impact or if the conditions for temporary suspension under point (a) are not met.

RemovedArticle 7 – paragraph 5 – subparagraph 1 a (new): Prior to temporarily suspending commercial relations or terminating the business relationship, companies shall first be required to assess whether the adverse impacts of doing so would be greater than the adverse impact which is intended to be prevented or mitigated. Should that be the case, companies may refrain from temporarily suspending commercial relations or terminating the business relationship. Where companies do temporarily suspend commercial relations or terminate the business relationship, they shall take steps to prevent, mitigate, or bring to an end the impacts of suspension or termination, provide reasonable notice to the business partner and keep that decision under review.

RemovedArticle 7 – paragraph 5 – subparagraph 2: Member States shall provide for the availability of an option to suspend or terminate a business relationship in contracts governed by their laws, except for contracts where the parties are obliged by law to enter into them. Companies may refer to supervisory authorities to receive guidance on the course of action to take.

RemovedArticle 7 – paragraph 6: 6. By way of derogation from paragraph 5, first subparagraph, point (b), when companies referred to in Article 3, point (a)(iv), provide financial services to entities that cause or contribute to potential adverse impacts within the meaning of paragraph 1, they shall not be required to terminate the financial service contract if this is strictly necessary to prevent bankruptcy to the entity to whom that service is being provided. In addition to paragraph 5, second subparagraph, a decision to terminate the financial service contract in derogation from paragraph 5, first subparagraph, point (b) may only be taken, as a last resort, if the leverage efforts of companies referred to in Article 3, point (a)(iv) have ultimately failed to influence the entity to whom that service is being provided to prevent or adequately mitigate adverse potential impacts.

RemovedArticle 8 – paragraph 1: 1. Member States shall ensure that companies take appropriate measures to bring actual adverse impacts that have been, or should have been, identified pursuant to Article 6 to an end, in accordance with this Article.

RemovedArticle 8 – paragraph 2: 2. Where the adverse impact cannot immediately be brought to an end, Member States shall ensure that companies adequately mitigate the extent of such an impact, while pursuing all efforts to bring the adverse impact to an end.

RemovedArticle 8 – paragraph 2 a (new): 2a. For the purposes of this Article, in cases where a company has caused an actual impact, appropriate measures shall be understood as measures which aim to mitigate the extent of an actual adverse impact, and remediate damage. In cases where a company has contributed to an actual adverse impact, appropriate measures shall be understood as measures which aim to mitigate the contribution to the impact, using or increasing the company’s leverage with other responsible parties to mitigate the potential adverse impact and contribute to remediating damage, to the extent of the contribution. In cases where a company’s operations, products or services are directly linked to an adverse impact through its relationships with other entities, appropriate measures shall be understood as measures which aim to use or increase the company’s leverage with responsible parties to seek to mitigate the adverse impact. A company directly linked to an adverse impact shall consider using its leverage with responsible parties to enable the remediation of any damage caused by an impact.

RemovedArticle 8 – paragraph 2 b (new): 2b. For the purposes of this Article, it shall be presumed that financial undertakings are directly linked to an adverse impact in their value chain without causing or contributing to it.

RemovedArticle 8 – paragraph 3 – introductory part: 3. Companies shall be required to take appropriate measures, including the following actions, where relevant:

RemovedArticle 8 – paragraph 3 – point a: (a) in accordance with Article 8c, neutralise the adverse impact or adequately mitigate its extent by restoring the affected persons and/or the environment to a situation equivalent or as close as possible to their situation prior to the impact. The action shall be proportionate and commensurate to the significance and scale of the adverse impact and to the contribution of the company’s conduct to the adverse impact and to its resources and leverage;

RemovedArticle 8 – paragraph 3 – point b: (b) where necessary due to the fact that the adverse impact cannot be immediately brought to an end, develop and implement a corrective action plan with reasonable and clearly defined timelines for the implementation of appropriate measures and action, and qualitative and quantitative indicators for measuring improvement. The preventative action plan shall be applicable and accurately tailored to the context of companies’ operations and value chain. Companies may develop their action plans in cooperation with industry initiatives. The development and implementation of a climate transition plan according to Article 15 shall be considered an appropriate measure to minimise environmental adverse impacts related to climate change mitigation pursuant to paragraphs 1 and 2 of this Article;

RemovedArticle 8 – paragraph 3 – point c: (c) choose to establish through contractual provisions with a partner with whom it has a business relationship that it will ensure compliance with a company’s code of conduct, and as necessary, a corrective action plan. Partners with whom the company has a business relationship could be asked to establish corresponding reasonable, non-discriminatory and fair contractual provisions with their partners, to the extent that they are part of the value chain. When such contractual assurances are obtained, paragraph 5 shall apply;

RemovedArticle 8 – paragraph 3 – point d: (d) make necessary modifications, improvements to, withdrawals of or investments in, the company’s own operations, such as into management, production or other operational processes, facilities, products and product traceability, projects, services and skills;

RemovedArticle 8 – paragraph 3 – point d a (new): (da) adapt business models and strategies, including purchasing practices, including those which contribute to living wages and incomes for their suppliers, in order to bring to an end or mitigate actual adverse impacts, and develop and use purchase policies that do not encourage actual adverse impacts on human rights or the environment;

RemovedArticle 8 – paragraph 3 – point e: (e) provide targeted and proportionate financial and administrative support for an SME with which the company has a business relationship;

RemovedArticle 8 – paragraph 3 – point e a (new): (ea) engage with a business relationship about the company’s expectations with regard to bringing to an end and mitigating actual adverse impacts, including by providing or enabling access to capacity-building, guidance, administrative and financial support such as loans or financing, taking into consideration the resources, knowledge and constraints of the business partner;

RemovedArticle 8 – paragraph 3 – point f a (new): (fa) when there is a direct linkage to impacts occurring in business relationships with other companies operating in the Union, appropriate measures can include notifying the relevant supervisory authority while continuing to make reasonable efforts to seek to bring the impact to an end or mitigate the impact.

RemovedArticle 8 – paragraph 3 a (new): 3a. When distributing or selling a product or providing a service, companies shall take appropriate measures to ensure that the composition, design and commercialisation of a product or service is in line with Union law and does not lead to adverse impacts, be it individual or collective. In this regard, particular attention shall be paid to potential adverse impact on children.

RemovedArticle 8 – paragraph 4: deleted

RemovedArticle 8 – paragraph 5 – subparagraph 1: The contractual provisions shall be accompanied by measures to support carrying out due diligence.

RemovedArticle 8 – paragraph 5 – subparagraph 2: When provisions, including contractual, are established, or a contract is entered into, with a business relationship, the terms used shall be fair, reasonable and non-discriminatory. Where measures to verify compliance are carried out in relation to SMEs, the company shall bear the cost of the independent third-party verification. SMEs may share the results of the verifications carried out in relation to themselves with multiple companies.

RemovedArticle 8 – paragraph 5 – subparagraph 2 a (new): The contractual provisions sought in accordance with paragraph 3 shall not be such as to result in the transfer of responsibility for carrying out due diligence in accordance with this Directive and the liability for failing to do so.

RemovedArticle 8 – paragraph 5 – subparagraph 2 b (new): In seeking such contractual provisions, companies shall assess whether the business partner can reasonably be expected to comply with those provisions.

RemovedArticle 8 – paragraph 6 – subparagraph 1 – introductory part: As regards actual adverse impacts within the meaning of paragraph 1 that a company caused or contributed to, and that could not be brought to an end or the extent of which could not be mitigated, and where there is no reasonable prospect of change, the company shall be required to refrain from entering into new or extending existing relations with the partner in connection to or in the value chain of which the impact has arisen and shall, where the law governing their relations so entitles them to, take one of the following actions as a last resort, in line with responsible disengagement:

RemovedArticle 8 – paragraph 6 – subparagraph 1 – point a: (a) temporarily suspend commercial relationships with the partner in question, while pursuing prevention and mitigation efforts

RemovedArticle 8 – paragraph 6 – subparagraph 1 – point b: (b) terminate the business relationship with respect to the activities concerned, on account of the severity of the actual adverse impact, or if the conditions for temporary suspension under point (a) are not met.

RemovedArticle 8 – paragraph 6 – subparagraph 1 a (new): Prior to temporarily suspending commercial relations or terminating the business relationship, companies shall first be required to assess whether the adverse impacts of doing so would be greater than the adverse impact which is intended to be brought to an end or mitigated. Should that be the case, companies may refrain from temporarily suspending commercial relations or terminating the business relationship. Where companies do temporarily suspend commercial relations or terminate the business relationship, they shall take steps to prevent, mitigate or bring to an end the impacts of suspension or termination, provide reasonable notice to the business partner and keep that decision under review.

RemovedArticle 8 – paragraph 6 – subparagraph 2: Member States shall provide for the availability of an option to suspend or terminate a business relationship in contracts governed by their laws, except for contracts where the parties are obliged by law to enter into them. Companies may refer to supervisory authorities to receive guidance on the course of action to take.

RemovedArticle 8 – paragraph 7: 7. By way of derogation from paragraph 6, point (b), when companies referred to in Article 3, point (a)(iv), provide financial services to entities that cause or contribute to actual adverse impacts in the meaning of paragraph 1, they shall not be required to terminate the financial service contract, if this is strictly necessary to prevent bankruptcy to the entity to whom that service is being provided. In addition to paragraph 6, second subparagraph, a decision to terminate the financial service contract in derogation from paragraph 6, point (b) may only be taken, as a last resort, if the leverage efforts of companies referred to in Article 3(1), point (a)(iv) have ultimately failed to influence the entity to whom that service is being provided to bring actual adverse impacts to an end or to minimise their extent.

RemovedArticle 8 a (new): Article 8a / Appropriate measures by institutional investors and asset managers to induce their investee companies to bring actual adverse impacts caused by them to an end / 1. Member States shall ensure that institutional investors and asset managers take appropriate measures as described in paragraph 3 of this Article to induce their investee companies to bring actual adverse impacts to an end that have been, or should have been identified pursuant to Article 6. / 2. Where the adverse impact cannot be brought to an end, Member States shall ensure that institutional investors and asset managers induce their investee companies to minimise the extent of such an impact. / 3. Where relevant, institutional investors and asset managers shall be required to engage with the investee company and exercise voting rights in line with Article 3g (1), point (a), of Directive 2007/36/EC [SRD2], in order to induce the management body of an investee company to bring the actual impact to and end or minimise its extent. The action sought from the investee company shall be proportionate to the significance and scale of the adverse impact and to the contribution of the investee company’s conduct to the adverse impact. Likewise, the actions required from institutional investors and asset managers shall be proportionate and commensurate, and shall take due account of the degree of control they have over the investee company.

RemovedArticle 8 b (new): Article 8b / Prioritising actual and potential adverse impacts / 1. In cases where it is not possible to prevent, bring to an end or mitigate all identified adverse impacts simultaneously through appropriate measures as outlined in Articles 7 and 8, companies may prioritise the order in which they take appropriate measures on the basis of the likelihood and severity of adverse impacts. / 2. Companies shall be required to take appropriate measures as per paragraph 1 according to the severity and likelihood of impacts and taking into account risk factors. / 3. Once the most severe and likely adverse impacts are addressed in accordance with Articles 7 or 8 in a reasonable time, the company shall address less severe and less likely adverse impacts.

RemovedArticle 8 c (new): Article 8c / Remediation of actual adverse impacts / 1. Member States shall ensure that where a company has caused or contributed to an actual adverse impact, that company shall take appropriate measures to remediate that adverse impact and the possible harm it has caused to people or the environment, or contribute to its remediation. The remediation may be proposed as a result of a non-judicial grievance procedure as laid down in Article 9. / 2. Such remedial measures shall aim to restore the affected persons and groups or communities and/or the environment to a situation equivalent or as close as possible to their situation prior to the impact. They may include compensation, restitution, rehabilitation, public apologies, reinstatement or a contribution to investigations. Companies shall prevent additional harm being caused. / 3. Member states shall ensure that the single helpdesk as designated pursuant to Article 14a acts as a contact point for due diligence mediation in order to assist companies and stakeholders in finding remedial solutions. In performing those duties, the single helpdesk shall be impartial, predictable and equitable. / 4. Where a company is directly linked to an adverse impact, Member States shall encourage its voluntary participation in any remedial measures, where appropriate, and encourage companies to consider using their leverage with responsible parties to enable the remediation of any damage caused by an impact.

RemovedArticle 8 d (new): Article 8d / Carrying out meaningful engagement with affected stakeholders / 1. Member States shall ensure that companies take appropriate measures to carry out meaningful engagement with affected stakeholders that allows for genuine interaction and dialogue in their due diligence process. To this end, the engagement shall cover information and consultation of affected stakeholders and shall be comprehensive, structural, effective, timely and culturally and gender sensitive. / 2. Where it is not possible to carry out meaningful engagement with affected stakeholders, or where engagement with additional expert perspectives is useful to allow the company to comply fully with the requirements of this Directive, in particular in the context of scoping and prioritisation decisions under Article 6, companies shall engage in a meaningful way with other relevant stakeholders, such as civil society organisations, or legal or natural persons defending human rights or the environment in order to gain credible insights into potential or actual adverse impacts, in order to be able to comply with the requirements of this Directive. / 3. Companies shall, as appropriate, provide comprehensive, targeted and relevant information to affected stakeholders about their value chain and their actual or potential adverse impacts on the environment, human rights and good governance. / 4. Affected stakeholders shall be allowed to request additional written information, which shall be provided by the com…

RemovedArticle 9 – title: Notification and non-judicial grievance mechanism

RemovedArticle 9 – paragraph 1: 1. Member States shall ensure that companies provide publicly available and effective notification and non-judicial grievance mechanisms at operational level, that can be used by persons and organisations listed in paragraph 2 to notify them of or raise grievances and request remediation, where they have legitimate information or concerns regarding actual or potential adverse human rights or environmental impacts with respect to the companies’ own operations, the operations of their subsidiaries and their value chains. Member States shall ensure that companies are able to provide such a possibility to submit notifications and grievances through collaborative arrangements, including industry initiatives, with other companies or organisations, by participating in multi-stakeholder grievance mechanisms or joining a global framework agreement.

RemovedArticle 9 – paragraph 2 – introductory part: (2) Member States shall ensure that the grievances may be submitted by:

RemovedArticle 9 – paragraph 2 – point a: (a) persons who are affected or have reasonable grounds to believe that they might be affected by an adverse impact, and the legitimate representatives of such individuals, or, in cases where there are no individuals, groups or communities affected by an adverse impact on the environment, credible and experienced organisations whose purpose includes the protection of the environment,

RemovedArticle 9 – paragraph 2 – point c: deleted

RemovedArticle 9 – paragraph 2 a (new): 2a. Member States shall ensure that notifications may be submitted by the persons and organisations listed in points (a) and (b) of paragraph 2, and in addition, in as far as they are not covered under those points, by the following: / (a) legal or natural persons defending human rights or the environment; / (b) civil society organisations active in the areas related to the value chain concerned.

RemovedArticle 9 – paragraph 3: 3. Member States shall ensure that the companies establish a procedure for dealing with notifications and grievances referred to in paragraph 1, including a procedure when the company considers the notifications or grievances to be unfounded, and inform the relevant affected stakeholders, and their representatives where applicable, and other relevant persons or organisations covered by paragraphs 2 and 2a, of those procedures. Member States shall ensure that where the notification or grievance is well-founded, the adverse impact that is the subject matter of the notification or grievance is deemed to be identified within the meaning of Article 6.

RemovedArticle 9 – paragraph 3 a (new): 3a. Member States shall ensure that when companies establish or participate in notification and grievance mechanisms, those mechanisms are legitimate, accessible, predictable, equitable, transparent, rights-compatible, gender- and culturally responsive, and based on engagement and dialogue. Notification and grievance mechanisms shall be designed and operated in a manner that is informed by the perspectives of stakeholders and adapted to the needs of people who may be most vulnerable to adverse impacts. Companies shall adopt and implement policies and processes to maintain the independence of the notification and grievance mechanism.

RemovedArticle 9 – paragraph 3 b (new): 3b. Companies shall take measures to ensure that persons submitting notifications or grievances are free from retaliation or retribution, including by ensuring that notifications and grievances can be raised either anonymously or confidentially, in accordance with national law and adopt and implement policies to that effect. Where information needs to be shared, it shall be in a manner that does not endanger the stakeholders’ safety, including by not disclosing their identity.

RemovedArticle 9 – paragraph 3 c (new): 3c. Member States shall ensure that persons submitting grievances under paragraph 2, where they do not do so anonymously, are entitled to receive timely and appropriate follow-up from the company with which they have filed a grievance pursuant to paragraph 1 and shall also be entitled: / (a) to be provided with the reasoning as to whether a grievance has been considered founded or unfounded and provided with information on the steps and actions taken; / (b) to engage with the company’s representatives at an appropriate level to discuss potential or actual adverse impacts that are the subject matter of the grievance; / (c) to request that companies remediate or contribute to the remediation of actual adverse impacts, in line with Article 8c.

RemovedArticle 9 – paragraph 4 – introductory part: 4. Member States shall ensure that persons submitting notifications under paragraph 2a, where they do not do so anonymously, are entitled to receive timely and appropriate follow-up from the company with which they have filed a notification pursuant to paragraph 1.

RemovedArticle 9 – paragraph 4 – point a: deleted

RemovedArticle 9 – paragraph 4 – point b: deleted

RemovedArticle 9 – paragraph 4 a (new): 4a. Member States shall ensure that supervisory authorities are empowered to issue guidance to companies and other relevant actors responsible for developing and administering notification and grievance mechanisms, including in relation to their compliance with the criteria set out in this Article, and in line with relevant international standards.

RemovedArticle 9 – paragraph 4 b (new): 4b. The submission of a notification or grievance under this Article shall not be a prerequisite for or preclude the persons submitting them from having access to the substantiated concerns procedure under Article 19 or to judicial or other non-judicial mechanisms, such as the OECD National contact points where they exist.

RemovedArticle 10 – title: Monitoring and verifying

RemovedArticle 10 – paragraph 1: Member States shall ensure that companies continuously verify the implementation and monitor the adequacy and effectiveness of their actions taken in accordance with this Directive. Monitoring and verification shall be based, where appropriate, on qualitative and quantitative indicators and be carried out continuously, taking into account the nature, severity and likelihood of the adverse impacts in question and whenever there are reasonable grounds to believe that new risks of the occurrence of those adverse impacts may arise. Where appropriate, the due diligence policy, the prevention action plan and the corrective action plan shall be reviewed and updated in accordance with the outcome of those assessments.

RemovedArticle 11 – paragraph 1: 1. Member States shall ensure that companies that are not subject to reporting requirements under Articles 19a, 29a and 40a of Directive 2013/34/EU report on the matters covered by this Directive by publishing on their website an annual statement in at least one of the official languages of the Union. The statement shall be published no later than 12 months after the balance sheet date of the financial year for which the statement is drawn up. For non-EU companies the statement will include information on the way to contact the company’s authorised representative as defined in Article 16.

RemovedArticle 11 – paragraph 2: 2. The Commission shall adopt delegated acts in accordance with Article 28 concerning the content and criteria for such reporting under paragraph 1, ensuring that it is consistent with the disclosure requirements for due diligence outlined in Article 40b of Directive 2013/34/EU, and specifying information on the description of due diligence, potential and actual adverse impacts and actions taken on those. This reporting should be sufficiently detailed to demonstrate it complied with the obligations under this Directive. / When adopting delegated acts, the Commission shall ensure that there is no duplication in reporting requirements for companies referred to in Article 3, point (a)(iv), that are subject to reporting requirements and consider principal adverse impacts under Article 4 of Regulation (EU) 2019/2088 of the European Parliament and of the Council, while maintaining in full the minimum obligations stipulated in this Directive. / For companies that do not have a website, Member States shall dedicate a website to the publication of the annual statement of the companies concerned.

RemovedArticle 11 a (new): Article 11a / Accessibility of information on the European Single Access Point (ESAP) / 1. Member States shall ensure that, when making public the annual statements drawn-up pursuant to Article 11(1) of this Directive, companies submit that information at the same time to the collection body referred to in paragraph 3 of this Article for accessibility on ESAP, as established under Regulation (EU) XX/XXXX [ESAP Regulation] of the European Parliament and of the Council1a. / That information shall comply with all of the following requirements: / (a) the information shall be prepared in a data extractable format as defined in Article 2, point (3), of Regulation (EU) XX/XXXX [ESAP Regulation]1b or, where required under Union law, in a machine-readable format, as defined in Article 2, point (13), of Directive (EU) 2019/1024 of the European Parliament and of the Council1c; / (b) the information shall be accompanied by all the following metadata: / (i) all the names of the company to which the information relates; / (ii) the legal entity identifier of the company, as specified pursuant to Article 7(4) of Regulation (EU) XX/XXXX [ESAP Regulation]; / (iii) the size of the company by category, as specified pursuant to Article 7(4) of Regulation (EU) XX/XXXX [ESAP Regulation]; / (iv) the type of information, as classified pursuant to Article 7(4) of Regulation (EU) XX/XXXX [ESAP Regulation]; / (v) the specific period for which the information is to be made publicly available on ESAP, whe…

RemovedArticle 12 – paragraph 1: In order to provide support to companies to facilitate their compliance with Article 7(2), point (b), and Article 8(3), point (c), the Commission shall, in consultation with Member States and relevant stakeholders, adopt guidance, tailored to the sector and size of companies, about voluntary model contract clauses by the application date of this Directive. Those model contractual clauses shall stipulate, as a minimum:

RemovedArticle 12 – paragraph 1 – point a (new): (a) the clear allocation of tasks between both contracting parties, in ongoing cooperation, and that contractual clauses shall not be such as to result in the transfer of responsibility for carrying out due diligence; and

RemovedArticle 12 – paragraph 1 – point b (new): (b) that without prejudice to Article 7 (5) and Article 8 (6), where contractual clauses are breached, companies shall first take appropriate measures in line with Article 7 (4) and Article 8 (5) and shall avoid terminating such clauses.

RemovedArticle 13 – paragraph 1: 1. In order to provide support to companies or to Member State authorities on how companies should fulfil their due diligence obligations, including in relation to rights and protections enshrined in the Annex, the Commission, in consultation with Member States, the European cross-industry and sectoral social partners and other relevant stakeholders, the European Union Agency for Fundamental Rights, the European Environment Agency, the European Labour Authority, the European External Action Service, the European Innovation Council and the Small and Medium-Sized Enterprises Executive Agency (EISMEA), the European Food Safety Authority, and where appropriate the OECD and other international bodies having expertise in due diligence, shall issue clear and easily understandable guidelines, including general and sector- specific guidance, in order to facilitate compliance in a practical manner.

RemovedArticle 13 – paragraph 1 a (new): 1a. In order to provide support to companies or to Member State authorities on how companies should fulfil their due diligence obligations, the guidelines shall include: / (a) information on the implementation of the human rights and environmental standards applicable to businesses based on the OECD Guidelines for Multinational Enterprises as clarified in the OECD Due Diligence Guidance for Responsible Business Conduct as well as the UN Guiding Principles on Business and Human Rights; / (b) lists of risk factors and accompanying guidance, including enterprise-level risk factors, geographic risk factors and sectoral risk factors; / (c) sector specific guidance, in particular for the following sector, in line with current or future OECD guidelines: / (i) the manufacture and the wholesale trade and retail of textiles, wearing apparel, fur, leather and related products (including footwear), / (ii) agriculture, water supply, the management of land and resources, including nature conservation, forestry, fisheries (including aquaculture), the rubber industry, the manufacture of food products, marketing and advertising of food and beverages, and the wholesale trade and retail of agricultural raw materials, live animals, animal products, wood, food, and beverages, and waste management, / (iii) mining and quarrying, the extraction, refining, transport and handling of mineral resources regardless from where they are extracted (including crude petroleum, natural gas, coal, lignite, metal…

RemovedArticle 13 – paragraph 1 b (new): 1b. The guidelines shall be made available no later than ... [1 year before the date of entry into force of obligations for companies under this Directive], in free of charge and easily accessible format, including digital, and in all the official languages of the Union. The Commission shall periodically review the relevance of its guidelines and adapt them, including to new best practices.

RemovedArticle 13 – paragraph 1 c (new): 1c. Country fact-sheets shall be updated regularly by the Commission and made publicly available in order to provide up-to-date information on the international Conventions and Treaties ratified by each of the Union’s trading partners. The Commission shall collect and publish trade and customs data on origins of raw materials, and intermediate and finished products, and publish information on human rights, environmental and governance potential or actual adverse impacts risks associated with certain countries or regions, sectors and sub-sectors, and products.

RemovedArticle 14 – paragraph 1: 1. Before the entry into force of this Directive, Member States with the support of the Commission shall develop and implement measures and toolboxes, in order to provide information, advice and support to companies and the partners with whom they have business relationships in their value chains in their efforts to fulfil the obligations resulting from this Directive, and set up and operate individually or jointly dedicated user-friendly websites, platforms or portals. Such information, advice and support shall be practical and tailored to the specific needs of SMEs in particular. Member States shall also ensure that training on how to perform due diligence is made available for companies. In doing so, Member States shall ensure complementarity and coherence with similar measures already in existence, such as information and promotion provided by OECD National Contact Points.

RemovedArticle 14 – paragraph 1 a (new): 1a. The Commission shall establish a dedicated digital portal for companies to access free of charge all templates and information relating to all reporting requirements stemming from this Directive and other Union legislative instruments specific to a particular company based on its size, sector, product and service, risk exposure etc., as well as access to information on funding and tendering opportunities in order to implement, fulfil and profit from their due diligence obligations.

RemovedArticle 14 – paragraph 1 b (new): 1b. Member States shall provide information and support for stakeholders and their representatives to exercise their engagement in due diligence, for their capacity development, and provide them with information and assistance to facilitate their access to justice. This shall include legal counsel and setting up and operating individually or jointly dedicated websites, platforms or portals. Member States may also provide financial support to stakeholders for the purpose of raising their awareness and facilitating access to the rights provided to them by this Directive, as well as support and protection for affected stakeholders in relation to potential or actual adverse impacts related to business operations.

RemovedArticle 14 – paragraph 2: 2. Without prejudice to applicable State aid rules, Member States shall provide financial and other support to SMEs, where relevant.

RemovedArticle 14 – paragraph 3: 3. The Commission shall establish advisors for due diligence under the scope of the Enterprise Europe Network and shall, including in view of ensuring consistency, complement Member States’ support measures building on existing Union action to support due diligence in the Union and in third countries and may devise new measures, including facilitation of joint stakeholder initiatives to help companies fulfil their obligations.

RemovedArticle 14 – paragraph 3 a (new): 3a. The Commission and Member States shall ensure that the Union’s cooperation and trade instruments support the development of an enabling environment in third countries, as well as developing and strengthening cooperation and partnership mechanisms with third countries, and relying on existing instruments, to address the root causes of adverse impacts on human rights and the environment , and build the capacity of third country economic actors to respect the environment and human rights.

RemovedArticle 14 – paragraph 4: 4. Without prejudice to Articles 18, 19 and 22, companies may participate in industry and multi-stakeholder initiatives to support the implementation of aspects of their due diligence obligations referred to in Articles 5 to 11 of this Directive to the extent that such initiatives are appropriate to support the fulfilment of the relevant obligations. They may be particularly appropriate to support sector-wide risk identification, providing tools for mitigation of specific risks, coordinating the use of companies’ leverage to enable remediation, and providing access to a grievance mechanism. The Commission, in collaboration with Member States, the OECD, the OHCHR and relevant stakeholders, shall:

RemovedArticle 14 – paragraph 4 – point a (new): (a) issue guidance and a methodology for assessing the scope, alignment with this Directive, and credibility including with regard to transparency, governance, oversight mechanisms and accountability of participating companies, of individual industry and multi-stakeholder initiatives, building on the OECD’s alignment assessment methodology;

RemovedArticle 14 – paragraph 4 – point b (new): (b) establish a centralised and public digital platform for companies, governments and other stakeholders to access free of charge independent third-party assessments of the scope, alignment, and credibility of individual industry and multi-stakeholder initiatives using the methodology developed by the Commission under point (a). Independent third-party assessments may be carried out by Member States, the OECD or other independent third party assessors;

RemovedArticle 14 – paragraph 4 – point c (new): (c) facilitate the dissemination of other relevant information on the scope, alignment and credibility of industry and multi-stakeholder initiatives and their outcomes. Member States shall foster the development of appropriate industry or multi-stakeholder initiatives to support companies in particular sectors or on particular issues that involve severe sustainability risks but lack such initiatives.

RemovedArticle 14 – paragraph 4 a (new): 4a. Without prejudice to Articles 18, 19 and 22, companies may use independent third party verification to support the implementation of aspects of their due diligence obligations referred to in Articles 5 to 11 of this Directive to the extent that such verification is appropriate to support the fulfilment of the relevant obligations. The Commission shall adopt a delegated act in accordance with Article 28 to specify the minimum standards, including transparency standards, for the independent third-party verification.

RemovedArticle 14 – paragraph 4 b (new): 4b. Relevant stakeholders may submit notifications and grievances pursuant to Article 9 through industry and multi-stakeholder initiatives that the company participates in.

RemovedArticle 14 a (new): Article 14a / Single helpdesk / 1. Each Member State shall designate one or more national helpdesks on corporate sustainability due diligence. Member States may assign this role to an existing authority such as National Contact Points where they exist but shall ensure that the single helpdesks are functionally independent from the tasks and role of the supervisory authorities. / 2. Companies may seek additional guidance and obtain further support and information about how best to fulfil their due diligence obligations through this point of contact, including on the role of collaborative industry and multi-stakeholder initiatives in supporting and assisting companies to meet specific aspects of their due diligence obligations. / 3. The single helpdesks may also liaise with each other to ensure cross-border cooperation, and, where relevant, Member States shall ensure that single helpdesks coordinate with other implementation bodies or other relevant international instruments, such as OECD National Contact Points.

RemovedArticle 15 – paragraph 1: 1. Member States shall ensure that companies referred to in Article 2 develop and implement a transition plan in line with the reporting requirements in Article 19a of Regulation (EU) 2021/0104 (CSRD), to ensure that the business model and strategy of the company are aligned with the objectives of the transition to a sustainable economy and with the limiting of global warming to 1.5°C in line with the Paris Agreement and the objective of achieving climate neutrality as established in Regulation (EU) 2021/1119 (European Climate Law) as regards its operations in the Union, including its 2050 climate neutrality target and the 2030 climate target. This plan shall include a description of:

RemovedArticle 15 – paragraph 1 – point a (new): (a) the resilience of the company’s business model and strategy to risks related to climate matters;

RemovedArticle 15 – paragraph 1 – point b (new): (b) the opportunities for the company related to climate matters;

RemovedArticle 15 – paragraph 1 – point c (new): (c) where appropriate an identification and explanation of decarbonisation levers within the company’s operations and value chain, including the exposure of the company to coal-, oil- and gas-related activities, as referred to in Articles 19a(2), point (a)(iii), and 29a(2), point (a)(iii), of Directive 2013/34/EU;

RemovedArticle 15 – paragraph 1 – point d (new): (d) how the company’s business model and strategy take account of the interests of the company’s affected stakeholders and of the impacts of the company on climate change;

RemovedArticle 15 – paragraph 1 – point e (new): (e) how the company’s strategy has been implemented and will be implemented with regard to climate matters, including related financial and investment plans;

RemovedArticle 15 – paragraph 1 – point f (new): (f) the time-bound targets related to climate change set by the company for scope 1, 2 and, where relevant, 3 emissions, including where appropriate, absolute emission reduction targets for greenhouse gas for 2030 and in five-year steps up to 2050 based on conclusive scientific evidence, and a description of the progress the company has made towards achieving those targets;

RemovedArticle 15 – paragraph 1 – point g (new): (g) a description of the role of the administrative, management and supervisory bodies with regard to climate matters.

RemovedArticle 15 – paragraph 2: deleted

RemovedArticle 15 – paragraph 3: 3. Member States shall ensure that directors are responsible for overseeing the obligations set out in this Article and that companies with more than 1000 employees on average have a relevant and effective policy in place to ensure that part of any variable remuneration for directors is linked to the company’s transition plan referred to in this Article. Such a policy shall be approved by the Annual General Meeting.

RemovedArticle 17 – paragraph 1: 1. Each Member State shall designate one or more supervisory authorities to supervise compliance with the obligations laid down in national provisions adopted pursuant to this Directive (‘supervisory authority’).

RemovedArticle 17 – paragraph 6: 6. By the date indicated in Article 30(1), point (a), Member States shall inform the Commission of the names and contact details of the supervisory authorities and, where applicable, the respective competences of those authorities, designated pursuant to this Article, as well as of their respective competence where there are several designated supervisory authorities. They shall inform the Commission of any changes thereto.

RemovedArticle 17 – paragraph 7: 7. The Commission shall make publicly available, including on its website, a list of the supervisory authorities, and, when a Member State has several supervisory authorities, the respective competences of those authorities. The Commission shall regularly update the list on the basis of the information received from the Member States.

RemovedArticle 17 – paragraph 8: 8. Member States shall guarantee the independence of the supervisory authorities and ensure that they, and all persons working for or who have worked for them and persons acting on their behalf, exercise their powers impartially, transparently and with due respect for obligations of professional secrecy. In particular, Member States shall ensure that the authority is legally and functionally independent from the companies falling within the scope of this Directive or other market interests, that its staff and the persons responsible for its management are free of conflicts of interest, subject to confidentiality requirements, and that they refrain from any action incompatible with their duties.

RemovedArticle 17 – paragraph 8 a (new): 8a. Member States shall ensure that supervisory authorities publish and make available on a website an annual report detailing their past activities, future work plan and priorities, and the most serious non-compliance issues.

RemovedArticle 17 – paragraph 8 b (new): 8b. Member States shall ensure that supervisory authorities recognise the role of implementation bodies of other relevant international instruments, such as OECD National Contact Points. The Commission, in consultation with relevant international bodies, may develop guidelines on the coordination between supervisory authorities and such implementation bodies.

RemovedArticle 18 – paragraph 1: 1. Member States shall ensure that the supervisory authorities are independent and impartial and have adequate powers, resources and expertise to carry out the tasks assigned to them under this Directive, including the power to require companies to provide information and carry out investigations, which can include where appropriate on site inspections and the hearing of relevant stakeholders, related to compliance with the obligations set out in this Directive.

RemovedArticle 18 – paragraph 4 – subparagraph 2: Taking remedial action does not preclude the imposition of administrative sanctions or the triggering of civil liability in case of damages, including in accordance with Articles 20 and 22, respectively.

RemovedArticle 18 – paragraph 5 – point b: (b) to impose sanctions in accordance with Article 20;

RemovedArticle 18 – paragraph 5 – point c: (c) to adopt interim measures to avoid the risk of severe or irreparable harm;

RemovedArticle 18 – paragraph 5 – point c a (new): (ca) to assess the validity of prioritisation strategies as foreseen under Article 8b and order a review if the requirements for such strategies have not been met.

RemovedArticle 18 – paragraph 7: 7. Member States shall ensure that each natural or legal person has the right to an effective judicial remedy against a legally binding decision by a supervisory authority concerning them, in accordance with national law and without prejudice to Member State rules on companies’ right to court appeal and other relevant safeguards.

RemovedArticle 18 – paragraph 7 a (new): 7a. Supervisory authorities shall publish and regularly update a list of all companies subject to this Directive under their jurisdiction, without containing any personal data within the meaning of Article 4(1) of Regulation (EU) 2016/679. The lists of companies subject to this Directive shall display links to access companies' due diligence statements where applicable.

RemovedArticle 18 – paragraph 7 b (new): 7b. Member States shall ensure that the supervisory authorities keep records of the investigations referred to in paragraph 1, indicating, in particular, their nature and result, as well as records of any notice of remedial action issued under paragraph 5.

RemovedArticle 18 – paragraph 7 c (new): 7c. Decisions of supervisory authorities regarding a company’s compliance with this Directive shall be without prejudice to the company’s civil liability under Article 22. In the context of ongoing civil liability proceedings and upon request of a court, supervisory authorities shall share any information they may have at their disposal about a given company with the court before which the proceedings brought under Article 22 are to be heard.

RemovedArticle 19 – paragraph 1 a (new): 1a. Member States shall ensure that, where persons submitting substantiated concerns so request, the supervisory authority takes the necessary measures for the appropriate protection of the identity of that person and their personal information, which, if disclosed, would be harmful to that person.

RemovedArticle 19 – paragraph 2: 2. Where the substantiated concern falls under the competence of another supervisory authority, the authority receiving the concern shall transmit it to that authority and inform the person that has submitted a substantiated concern as provided for in paragraph 1.

RemovedArticle 19 – paragraph 3: 3. Member States shall ensure that supervisory authorities assess the substantiated concerns and, where appropriate, exercise their powers as referred to in Article 18 within a reasonable period of time.

RemovedArticle 19 – paragraph 4: 4. The supervisory authority shall, as soon as possible and in accordance with the relevant provisions of national law and in compliance with Union law, inform the person referred to in paragraph 1 of the result of the assessment of their substantiated concern and of its decision to accede to or refuse the request for action, and shall provide the reasoning for it, and a description of the further steps and measures it will take. Supervisory authorities may allow for additional information to be provided by the person who has submitted the concern.

RemovedArticle 19 – paragraph 4 a (new): 4a. Member States shall ensure that supervisory authorities establish easily accessible channels for receiving concerns. Procedures to submit substantiated concerns shall be fair, equitable, timely and free of charge. Member States shall ensure that practical information is made available to the public on access to administrative and judicial review procedures.

RemovedArticle 19 – paragraph 5: 5. Member States shall ensure that the persons submitting the substantiated concern according to this Article have access to a court or other independent and impartial public body competent to review the procedural and substantive legality of the decisions, acts or failure to act of the supervisory authority.

RemovedArticle 20 – paragraph 2: 2. In deciding whether to impose sanctions and, if so, in determining their nature and appropriate level, due account shall be taken of:

RemovedArticle 20 – paragraph 2 – point a (new): (a) the company’s efforts to comply with any remedial action required of them by a supervisory authority;

RemovedArticle 20 – paragraph 2 – point b (new): (b) any investments made and any targeted support provided pursuant to Articles 7 and 8;

RemovedArticle 20 – paragraph 2 – point c (new): (c) any collaboration with other entities to address adverse impacts in its value chains;

RemovedArticle 20 – paragraph 2 – point d (new): (d) the seriousness and duration of the company’s infringement, or the severity of the impacts that have occurred;

RemovedArticle 20 – paragraph 2 – point e (new): (e) the extent to which prioritisation decisions were reasonable, credible and taken in good faith;

RemovedArticle 20 – paragraph 2 – point f (new): (f) any previous infringements by the company of national provisions adopted pursuant to this Directive;

RemovedArticle 20 – paragraph 2 – point g (new): (g) the financial benefits gained or losses avoided by the company due to the infringement, if the relevant data are available;

RemovedArticle 20 – paragraph 2 – point h (new): (h) penalties imposed in respect of similar infringements in other Member States;

RemovedArticle 20 – paragraph 2 – point i (new): (i) whether the company has effectively dealt with complaints or proposals raised by persons or affected stakeholders, including pursuant to Article 9;

RemovedArticle 20 – paragraph 2 – point j (new): (j) any other aggravating or mitigating factors applicable to the circumstances of the case.

RemovedArticle 20 – paragraph 2 a (new): 2a. At least the following measures and sanctions shall be provided for: / (a) pecuniary sanctions; / (b) a public statement indicating that a company is responsible and the nature of the infringement; / (c) the obligation to perform an action, including to cease the conduct constituting the infringement and to desist from any repetition of that conduct; / (d) the suspension of products from free circulation or export.

RemovedArticle 20 – paragraph 3: 3. When pecuniary sanctions are imposed, they shall be based on the company’s net worldwide turnover. The maximum limit of pecuniary sanctions shall be not less than 5% of the net worldwide turnover of the company in the business year preceding the fining decision.

RemovedArticle 20 – paragraph 3 – subparagraph 1 a (new): Member States shall ensure that, with regards to companies referred to in Article 2(1), point (b) and Article 2(2), point (b), administrative pecuniary sanctions are calculated taking into account the consolidated turnover reported by that company.

RemovedArticle 20 – paragraph 3 a (new): 3a. Member States shall lay down rules so that companies which are formed in accordance with the legislation of a third country under Article 2(2) shall be excluded from public procurement processes if they fail to appoint an authorised representative under Article 16.

RemovedArticle 20 – paragraph 4: 4. Member States shall keep a record of sanctions that have been imposed and ensure that any decision of the supervisory authorities containing sanctions related to the breach of the provisions of this directive is published. The published decision shall not contain any personal data within the meaning of Article 4(1) of Regulation (EU) 2016/679.

RemovedArticle 21 – paragraph 1 – subparagraph 1: The Commission shall set up a European Network of Supervisory Authorities, composed of representatives of the supervisory authorities. The Network shall facilitate the cooperation of the supervisory authorities and the coordination and alignment of regulatory, investigative, sanctioning and supervisory practices of the supervisory authorities and, as appropriate, sharing of information among them, as well as ensuring regular public communication on the activities of the Network.

RemovedArticle 21 – paragraph 1 – subparagraph 2: The Commission shall invite the European Agency for Fundamental Rights, the European Environment Agency, the European Labour Authority, the European Innovation Council and SMEs Executive Agency, and the European Securities and Markets Authority and other Union agencies with relevant expertise in the areas covered by this Directive to join the European Network of Supervisory Authorities.

RemovedArticle 21 – paragraph 2 a (new): 2a. Member States shall cooperate with the Network in order to identify the companies within their jurisdiction , in particular by providing all necessary information in order to assess whether a non-European company fulfils the criteria set in Article 2.

RemovedArticle 21 – paragraph 8 a (new): 8a. The European Network of Supervisory Authorities shall publish a register of non-EU companies and their compliance.

RemovedArticle 22 – paragraph 1 – point a: (a) they failed to comply with the obligations laid down in this Directive and;

RemovedArticle 22 – paragraph 1 – point b: (b) as a result of this failure the company caused or contributed to an actual adverse impact that should have been identified, prioritised, prevented, mitigated, brought to an end, remediated or its extent minimised through the appropriate measures laid down in this Directive and led to damage.

RemovedArticle 22 – paragraph 2 – subparagraph 1: deleted

RemovedArticle 22 – paragraph 2 – subparagraph 2: In the assessment of the existence and extent of liability, due account shall be taken of the extent of the company’s efforts, insofar as they relate directly to the damage in question, to take remedial action, including that required of them by a supervisory authority, any investments made and any targeted support provided pursuant to Articles 7 and 8, as well as any collaboration with other entities and affected stakeholders to address adverse impacts in its value chains.

RemovedArticle 22 – paragraph 2 a (new): 2a. Member States shall ensure that: / (a) the limitation period for bringing actions for damages is at least ten years and measures are in place to ensure that costs of the proceedings are not prohibitively expensive for claimants to seek justice; / (b) claimants are able to seek injunctive measures, including summary proceedings. These shall be in the form of a definitive or provisional measure to cease an action which may be in breach of this Directive, or to comply with a measure under this Directive; / (c) measures are in place to ensure that mandated trade unions, civil society organisations, or other relevant actors acting in the public interest can bring actions before a court on behalf of a victim or a group of victims of adverse impacts, and that these entities have the rights and obligations of a claimant party in the proceedings, without prejudice to existing national law; / (d) when a claim is brought, that a claimant provides elements substantiating the likelihood of a company’s liability under this Directive and has indicated that additional evidence lies in the control of the company, courts are able to order that such evidence be disclosed by the company in accordance with national procedural law, subject to the Union and national rules on confidentiality and proportionality.

RemovedArticle 22 – paragraph 2 b (new): 2b. Companies that have participated in industry or multi-stakeholder initiatives, multi-stakeholders initiatives, or used third-party verification or contractual clauses to support the implementation of specific aspects of their due diligence obligations can still be held liable in accordance with this Article.

RemovedArticle 22 – paragraph 3: 3. The civil liability of a company for damages arising under this provision shall be without prejudice to the civil liability of its subsidiaries or of any direct and indirect business partners in the value chain. In such instances as where a subsidiary is under the scope of this Directive and has been dissolved by the parent company or has dissolved itself intentionally in order to avoid liability, the liability can be imputed to the parent company in case there is no legal successor.

RemovedArticle 22 – paragraph 4: 4. The civil liability rules under this Directive shall not limit companies' liability under Union or national legal systems, including rules on joint and several liability.

RemovedArticle 24 – title: Public support, public procurement and public concessions

RemovedArticle 24 – paragraph 1: Member States shall ensure that (non-)compliance with the obligations resulting from this Directive or their voluntary implementation qualifies as one of the environmental and social aspects to be taken into consideration in accordance with the rules applicable to the provision of public support or the award of public contracts and concessions.

RemovedAmendments 391 and 405

RemovedArticle 26

RemovedAmendment: deleted / (deleted) / (deleted) / (deleted)

RemovedArticle 28 – paragraph 2: 2. The power to adopt delegated acts referred to in Article 3(2), Article 11 and Article 14(4a) shall be conferred on the Commission for a period of 5 years from … [date of entry into force of this Directive]. The Commission shall draw up a report in respect of the delegation of power no later than nine months before the end of the 5-year period. The delegation of power shall be tacitly extended for periods of an identical duration, unless the European Parliament or the Council opposes such an extension no later than three months before the end of each period.

RemovedArticle 28 – paragraph 3: 3. The delegation of power referred to in Article 3(2), and Article 11 or Article 14(4a) may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.

RemovedArticle 28 – paragraph 6: 6. A delegated act adopted pursuant to Article 3(2), Article 11 or Article 14(4a) shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of two months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by two months at the initiative of the European Parliament or of the Council.

RemovedArticle 29 – title: Review and reporting

RemovedArticle 29 – paragraph 1 – introductory part: 1. No later than … [OP please insert the date = 6 years after the date of entry into force of this Directive], and every 3 years thereafter, the Commission shall submit a comprehensive report to the European Parliament and to the Council on the implementation of this Directive. The report shall evaluate the effectiveness of this Directive in reaching its objectives, in particular regarding its effectiveness in preventing potential adverse impacts, bringing actual adverse impacts to an end or minimising their extent globally, derive recommendations for actions and shall be accompanied, if appropriate, by a legislative proposal. The report shall assess in particular the following issues:

RemovedArticle 29 – paragraph 1 – point -a (new): (-a) the impact of this Directive on SMEs, accompanied by an account and assessment of the effectiveness of the different measures and tools for support provided to SMEs by the Commission and the Member States;

RemovedArticle 29 – paragraph 1 – point -a a (new): (-aa) an assessment of the number of small and medium-sized undertakings voluntarily applying corporate sustainability and due diligence in line with this Directive;

RemovedArticle 29 – paragraph 1 – point -a b (new): (-ab) the effectiveness of this Directive in achieving its objectives, including the associated indirect costs and the economic, social and environmental benefits thereof as well as the effects on the competitiveness of European Union companies;

RemovedArticle 29 – paragraph 1 – point a: (a) whether the thresholds regarding the number of employees and net turnover laid down in Article 2 need to be lowered, in particular for certain sectors, whether the modalities for calculating thresholds are appropriate and whether significant loopholes need to be closed for the Directive to apply to all relevant legal forms of economic operators and complex corporate structures;

RemovedArticle 29 – paragraph 1 – point a a (new): (aa) the effectiveness of the enforcement mechanisms put in place at national level and of the sanctions and procedures for civil liability in particular;

RemovedArticle 29 – paragraph 1 – point a b (new): (ab) the convergence and divergence between national laws of the Member States transposing this Directive;

RemovedArticle 29 – paragraph 1 – point b: deleted

RemovedArticle 29 – paragraph 1 – point c: deleted

RemovedArticle 29 – paragraph 1 – point d: (d) whether Articles 4 to 14 should be extended to additional adverse impacts, in particular to also encompass adverse impacts on good governance.

RemovedArticle 29 – paragraph 1 – point d a (new): (da) whether a broad sustainability plan, dealing with other environmental impacts than climate, shall be developed;

RemovedArticle 29 – paragraph 1 – point d b (new): (db) whether the definition of "value chain" as regards regulated financial undertakings should be extended to a wider range of companies;

RemovedArticle 29 – paragraph 1 a (new): 1a. The Commission shall initiate and coordinate an annual Union-wide assessment of the resilience of companies to adverse scenarios related to their value chains. The Commission shall provide this assessment to the European Parliament and the Council.

RemovedArticle 30 – paragraph 1 – subparagraph 2 – introductory part: They shall apply those provisions from… [OJ to insert: 3 years from the entry into force of this Directive] as regards companies referred to in Article 2(1) which had more than 1000 employees on average and had a net worldwide turnover of more than EUR 150 million in the last financial year, or were the ultimate parent company of a group with such a number of employees and generating such a turnover, and Article 2(2) which generated a net turnover of more than EUR 150 million in the Union in the financial year preceding the last financial year, or were the ultimate parent company of a group generating such a turnover. / They shall apply those provisions from… [OJ to insert: 4 years from the entry into force of this Directive] as regards companies referred to in Article 2(1), which had more than 500 employees on average and had a net worldwide turnover of more than EUR 150 million in the last financial year, or were the ultimate parent company of a group with such a number of employees and generating such a turnover. / They shall apply those provisions from… [OJ to insert: 4 years from entry into force of this Directive] as regards companies referred to in Article 2(1) point (a), which had more than 250 employees on average and had a net worldwide turnover of more than EUR 40 million, and Article 2(2) which generated a net turnover of more than EUR 40 million in the Union and EUR 150 million worldwide in the financial year preceding the last financial year or were the ultimate…

RemovedArticle 30 – paragraph 1 – subparagraph 2 – point a: deleted

RemovedArticle 30 – paragraph 1 – subparagraph 2 – point b: deleted

RemovedAnnex I – Part I – subheading 1 – title: 1. Rights and prohibitions included in international human rights agreements

RemovedAnnex I – Part I – subheading 1 – point 1: 1. The people's right to dispose of a land's natural resources and to not be deprived of means of subsistence in accordance with Article 1 of the International Covenant on Civil and Political Rights;

RemovedAnnex I – Part I – subheading 1 – point 2: 2. The right to life and security in accordance with Article 3 of the Universal Declaration on Human rights;

RemovedAnnex I – Part I – subheading 1 – point 3: 3. The prohibition of torture, cruel, inhuman or degrading treatment in accordance with Article 5 of the Universal Declaration of Human Rights;

RemovedAnnex I – Part I – subheading 1 – point 4: 4. The right to liberty and security in accordance with Article 9 of the Universal Declaration of Human Rights;

RemovedAnnex I – Part I – subheading 1 – point 5: 5. The prohibition of arbitrary or unlawful interference with a person's privacy, family, home or correspondence and attacks on their reputation, in accordance with Article 17 of the Universal Declaration of Human Rights;

RemovedAnnex I – Part I – subheading 1 – point 6: 6. The prohibition of interference with the freedom of thought, conscience and religion in accordance with Article 18 of the Universal Declaration of Human Rights;

RemovedAnnex I – Part I – subheading 1 – point 7: 7. The right to enjoy just and favourable conditions of work including remuneration that provides for a decent living, safe and healthy working conditions and reasonable limitation of working hours. This includes both the right to a living wage for employees and the right to a living income for self-employed workers and smallholders in accordance with Article 7 of the International Covenant on Economic, Social and Cultural Rights and Article 23(3) of the Universal Declaration of Human Rights;

RemovedAnnex I – Part I – subheading 1 – point 7 a (new): 7a The right of everyone to an adequate standard of living for themselves and their family, including adequate food, clothing and housing, and to continuous improvement of living conditions in accordance with Article 11 of the International Covenant on Economic, Social and Cultural Rights and Article 25 of the Universal Declaration of Human Rights;

RemovedAnnex I – Part I – subheading 1 – point 8: 8. The prohibition to restrict workers’ access to adequate housing, if the workforce is housed in accommodation provided by the company, and to restrict workers’ access to adequate food, clothing, and water and sanitation in the workplace in accordance with Article 11 of the International Covenant on Economic, Social and Cultural Rights;

RemovedAnnex I – Part I – subheading 1 – point 9: 9. The right of the child to have his or her best interests given primary consideration in all decisions and actions that affect children in accordance with Article 3 of the Convention of the Rights of the Child; the right of the child to develop to his or her full potential in accordance with Article 6 of the Convention of the Rights of the Child; the right of the child to the highest attainable standard of health in accordance with Article 24 of the Convention on the Rights of the Child; the right to social security and an adequate standard of living in accordance with Article 26 and 27 of the Convention on the Rights of the Child; the right to education in accordance with Article 28 of the Convention on the Rights of the Child; the right of the child to be protected from all forms of sexual exploitation and sexual abuse and to be protected from being abducted, sold or moved illegally to a different place in or outside their country for the purpose of exploitation, in accordance with Articles 34 and 35 of the Convention of the Rights of the Child;

RemovedAnnex I – Part I – subheading 1 – point 10: 10. The prohibition of the employment of a child under the age at which compulsory schooling is completed and, in any case, is not less than 15 years, except where the law of the place of employment so provides in accordance with Article 2 (4) and Articles 4 to 8 of the International Labour Organization Minimum Age Convention, 1973 (No. 138);

RemovedAnnex I – Part I – subheading 1 – point 11 – introductory part: 11. The prohibition of child labour pursuant to Article 32 of the Convention on the Rights of the Child, including the worst forms of child labour for children (persons below the age of 18 years) in accordance with Article 3 of the of the International Labour Organization Worst Forms of Child Labour Convention, 1999 (No. 182). This includes:

RemovedAnnex I – Part I – subheading 1 – point 12: 12. The prohibition of forced labour; this includes all work or service that is exacted from any person under the menace of any penalty and for which the said person has not offered himself or herself voluntarily, for example as a result of debt bondage or trafficking in human beings; excluded from forced labour are any work or services that comply with Article 2 (2) of International Labour Organization Forced Labour Convention, 1930 (No. 29) or with Article 8 (3) (b) and (c) of the International Covenant on Civil and Political Rights;

RemovedAnnex I – Part I – subheading 1 – point 13: 13. The prohibition of all forms of slavery, practices akin to slavery, serfdom or other forms of domination or oppression in the workplace, such as extreme economic or sexual exploitation and humiliation in accordance with Article 4 of the Universal Declaration of Human Rights and Art. 8 of the International Covenant on Civil and Political Rights;

RemovedAnnex I – Part I – subheading 1 – point 14: 14. The prohibition of human trafficking in accordance with Article 3 of the Palermo Protocol to Prevent, Suppress and Punish Trafficking in Persons Especially Women and Children, supplementing the United Nations Convention against Transnational Organized Crime;

RemovedAnnex I – Part I – subheading 1 – point 15 – introductory part: 15. The right to freedom of association, assembly, the rights to organise and collective bargaining in accordance with Article 20 of the Universal Declaration of Human Rights, Articles 21 and 22 of the International Covenant on Civil and Political Rights Article 8 of the International Covenant on Economic, Social and Cultural Rights, the International Labour Organization Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) and the International Labour Organization Right to Organise and Collective Bargaining Convention, 1949 (No. 98), including the following rights:

RemovedAnnex I – Part I – subheading 1 – point 16: 16. The prohibition of unequal treatment in employment, unless this is justified by the requirements of the employment in accordance with Article 2 and Article 3 of the International Labour Organisation Equal Remuneration Convention, 1951 (No. 100), Article 1 and Article 2 of the International Labour Organisation Discrimination (Employment and Occupation) Convention, 1958 (No. 111) and Article 7 of the International Covenant on Economic, Social and Cultural Rights; unequal treatment includes, in particular, the payment of unequal remuneration for work of equal value;

RemovedAnnex I – Part I – subheading 1 – point 17: 17. The prohibition of withholding an adequate living wage in accordance with Article 7 of the International Covenant on Economic, Social and Cultural Rights;

RemovedAnnex I – Part I – subheading 1 – point 18 – introductory part: 18. The prohibition of causing any environmental degradation, such as harmful soil change, water or air pollution, harmful emissions, or excessive water consumption or other impact on natural resources, that

RemovedAnnex I – Part I – subheading 1 – point 18 – point a: (a) impairs the natural bases for the preservation and production of food and feed or

RemovedAnnex I – Part I – subheading 1 – point 18 – point d a (new): (da) impairs health, such as causing epidemics, taking into account the One Health approach or

RemovedAnnex I – Part I – subheading 1 – point 18 – point e: (e) affects ecological integrity, such as deforestation, in accordance with Article 3 of the Universal Declaration of Human Rights, Article 5 of the International Covenant on Civil and Political Rights and Article 12 of the International Covenant on Economic, Social and Cultural Rights,

RemovedAnnex I – Part I – subheading 1 – point 19: 19. The prohibition to unlawfully evict or take land, forests and waters when acquiring, developing or otherwise use land, forests and waters, including by deforestation, the use of which secures the livelihood of a person in accordance with Article 11 of the International Covenant on Economic, Social and Cultural Rights;

RemovedAnnex I – Part I – subheading 1 – point 19 a (new): 19a. The rights of indigenous peoples to self-determination in accordance with Article 1 of the International Covenant on Civil and Political Rights, Article 1 of the International Covenant on Economic, Social and Cultural Rights, and Article 5 of the International Convention on the Elimination of All forms of Racial Discrimination, and their right to give, modify, withhold or withdraw their free, prior, and informed consent to interventions, decisions and activities that may affect their lands, territories, resources and rights, in accordance with Article 27 of the International Covenant on Civil and Political Rights and Article 15 of the International Covenant on Economic, Social and Cultural Rights and Articles 2 and 5 of the International Convention on the Elimination of All Forms of Racial Discrimination;

RemovedAnnex I – Part I – subheading 1 – point 20: 20. The indigenous peoples’ right to the lands, territories and resources which they have traditionally owned, occupied or otherwise used or acquired in accordance with Articles 1 and 27 of the International Covenant on Civil and Political Rights and Articles 1, 2 and 15 of the International Covenant on Economic, Social and Cultural Rights and Article 5 of the International Convention on the Elimination of All Forms of Racial Discrimination

RemovedAnnex I – Part I – subheading 1 – point 21: 21. A prohibition or right not covered by points 1 to 20 above but included in the human rights agreements listed in Section 2 of this Part, where there is a foreseeable risk that such a prohibition or right may be affected.

RemovedAnnex I – Part I – subheading 2 – title: 2. Human rights and fundamental freedoms conventions and instruments

RemovedAnnex I – Part I – subheading 2 – indent 11: — The United Nations Declaration on the Rights of Persons Belonging to National or Ethnic, Religious and Linguistic Minorities;

RemovedAnnex I – Part I – subheading 2 – indent 11 a (new): — The United Nations Declaration on the Rights of Peasants and Other People Working in Rural Areas;

RemovedAnnex I – Part I – subheading 2 – indent 12 a (new): — United Nations Convention against Corruption, 2003;

RemovedAnnex I – Part I – subheading 2 – indent 12 b (new): — OECD Anti-Bribery Convention, 1997;

RemovedAnnex I – Part I – subheading 2 – indent 14 a (new): — The International Labour Organisation’s Indigenous and Tribal Peoples’ Convention, 1989 (No. 169);

RemovedAnnex I – Part I – subheading 2 – indent 15 – subindent 5 a (new): — ILO Occupational Safety and Health Convention, 1981 (No. 155)

RemovedAnnex I – Part I – subheading 2 – indent 15 – subindent 5 b (new): — ILO Promotional Framework for Occupational Safety and Health, 2006 (No 187)

RemovedAnnex I – Part I – subheading 2 – indent 15 a (new): — The International humanitarian law instruments as laid out in the Geneva Conventions and additional protocols

RemovedAnnex I – Part I – subheading 2 – indent 15 b (new): — Council of Europe Convention on preventing and combating violence against women and domestic violence

RemovedAnnex I – Part II – title: Union and internationally recognized objectives and prohibitions included in environmental and climate conventions and Union legislation

RemovedAnnex I – Part II – point - 1 (new): - 1. The obligation to identify and prevent, mitigate or bring to an end an adverse impact on one of the following environmental categories: / a) climate change; / b) biodiversity loss; / c) air, water and soil pollution; / d) degradation of land, marine and freshwater ecosystems; / e) deforestation; / f) overconsumption of material, water, energy and other natural resources; / g) harmful generation and mismanagement of waste, including hazardous substances;

RemovedAnnex I – Part II – point 1: deleted

RemovedAnnex I – Part II – point 2: 2. The prohibition to import or export any specimen included in an Appendix of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) of 3 March 1973 without a permit, pursuant to Articles III, IV and V;

RemovedAnnex I – Part II – point 3: 3. The prohibition of the manufacture of mercury-added products pursuant to Article 4 (1) and Annex A Part I of the Minamata Convention on Mercury of 10 October 2013 (Minamata Convention);

RemovedAnnex I – Part II – point 4: 4. The prohibition of the use of mercury and mercury compounds in manufacturing processes within the meaning of Article 5 (2) and Annex B Part I of the Minamata Convention from the phase-out date specified in the Convention for the respective products and processes;

RemovedAnnex I – Part II – point 5: 5. The prohibition of the treatment of mercury waste contrary to the provisions of Article 11 (3) of the Minamata Convention;

RemovedAnnex I – Part II – point 6: 6. The prohibition of the production and use of chemicals pursuant to Article 3 (1) (a) (i) and Annex A of the Stockholm Convention of 22 May 2001 on Persistent Organic Pollutants (POPs Convention), in the version of Regulation (EU) 2019/1021 of the European Parliament and of the Council of 20 June 2019 on persistent organic pollutants (OJ L 169 of 25 June 2019 pp. 45-77;

RemovedAnnex I – Part II – point 7: 7. The prohibition of the handling, collection, storage and disposal of waste in a manner that is not environmentally sound in accordance with the regulations in force in the applicable jurisdiction under the provisions of Article 6 (1) (d) (i) and (ii) of the POPs Convention;

RemovedAnnex I – Part II – point 8: deleted

RemovedAnnex I – Part II – point 9: 9. The prohibition of the production and consumption of specific substances that deplete the ozone layer (i.e., CFCs, Halons, CTC, TCA, BCM, MB, HBFCs and HCFCs) after their phase-out pursuant to the Vienna Convention for the protection of the Ozone Layer and its Montreal Protocol on substances that deplete the Ozone Layer;

RemovedAnnex I – Part II – point 10 – introductory part: 10. The prohibition of exports of hazardous waste within the meaning of Article 1 (1) and other wastes within the meaning of Article 1 (2) of the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal of 22 March 1989 (Basel Convention) and within the meaning of Regulation (EC) No 1013/2006 of the European Parliament and of the Council of 14 June 2006 on shipments of waste (OJ L 190 of 12 July 2006 pp. 1-98) (Regulation (EC) No 1013/2006), as last amended by Commission Delegated Regulation (EU) 2020/2174 of 19 October 2020 (OJ L 433 of 22 December 2020 pp. 11-19)

RemovedAnnex I – Part II – point 12 a (new): 12a. The obligation to achieve reductions in greenhouse gas emissions interpreted in line with Article 2 (1)(a), Article 4 (1), Article 4 (2), and Article 5 (1) of the Paris Agreement under the United Nations Framework on Climate Change, the European Climate Law, and the Global Methane Pledge.

RemovedAnnex I – Part II – point 12 b (new): 12b. The obligation to take all measures consistent with the UN Convention on the Laws of the Sea (UNCLOS) that are necessary to prevent, reduce and control pollution of the marine environment from any source, using for this purpose the best practicable means at their disposal and in accordance with their capabilities, in line with Article 194(1) of UNCLOS, including Article 194 (3)(a), Article 194 (3)(b), Article 194 (3)(c), and Article 194 (3)(d) of UNCLOS.

RemovedAnnex I – Part II – point 12 c (new): 12c. The rights of access to information, public participation in decision making and access to justice in environmental matters in accordance with, in particular, Articles 4, 6, and 9 of the Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters (Aarhus Convention)

RemovedAnnex I – Part II – point 12 d (new): 12d. The obligation to ensure that persons, groups and organizations that promote and defend human rights in environmental matters relating to a company’s value chain are able to act free from threat, restriction and insecurity and are not penalized, persecuted or harassed in any way for their involvement, in accordance with Article 3 (8) of the Aarhus Convention.

RemovedAnnex I – Part II – point 12 e (new): 12e. The obligation to take all appropriate measures to prevent, control and reduce any transboundary impact on transboundary waters in line with the 1992 Convention on the Protection and Use of Transboundary Watercourses and International Lakes.