Ref. Ares(2022)3404712 - 03/05/2022
Meeting between Commissioner Breton,
Sustainable Corporate Governance – Mandatory due diligence
BRIEFING NOTE (Commission Internal)
Scene setter/Context of the meeting:
Objective of the meeting:
x Exchange views on the Sustainable Corporate Governance
initiative including mandatory due diligence legislation
[adoption: planned in early 2022].
x We believe that the new legislation has to be implementable.
We are looking for effective, efficient and feasible solutions.
x We are trying to achieve an EU harmonised approach that is
balanced, pragmatic and proportionate (i.e. SMEs) taking into
account the situation of EU industry post-COVID and avoiding to
harm EU global competitiveness.
x It must also work for SMEs that might become subject to the
obligation throughout global supply chains.
x Our initiative is building upon existing UN and OECD standards
Key questions to the interlocutor
On Sustainable corporate governance:
Regarding due diligence, what proportionality measures could be put in
place for SMEs whether they fall under the scope of the new legislation or
indirectly affected through the trickle-down effect in the supply chain? And
what type of supporting measures?
How do you see an effective regime for liability for harm caused in the
Defensives / Q&A
How will the Commission ensure that the new legislation is in
line with existing standards?
x Our initiative is looking into building upon existing UN and
OECD standards and guidelines (the United Nations’ Guiding
Principles on Businesses and Human Rights, as well as on the
OECD Guidelines for Multinational Enterprises and the
related Due Diligence Guidance for Responsible Business
Conduct). According to these, due diligence is inherently risk
based and requires to deploy reasonable efforts.
Will the due diligence legislation extend beyond Tier 1 in the
x Our objective is to ensure that the rules are effectively
and cannot be circumvented
x We are exploring to what extent obligations and civil
liability should extend beyond tier 1 as human rights, social
and environmental harm occurs more often beyond tier
of the supply chains.
x A balance needs to be struck, considering for instance
whether harm was foreseeable to the company and to
which extent it can exert leverage over its suppliers.
How will the EU ensure that the rules apply also to third country
x We are looking into possible ways to cover some third-
country companies operating in the EU and generating
important turnover on the EU market to ensure level
playing field for EU companies.
x There is also an ongoing reflection on how to ensure that
trade agreements support the transition better.
In light of the announcement of banning products made with
forced labour from the EU markets, will the SCG initiative focus
on fighting forced labour?
x President von der Leyen reiterated in the State of the
Union speech the strong commitment to tackle forced
labour in global value chains
x The Trade Policy Review Communication
of 18 February
2021 makes clear that forced labour should not find a
place in the value chains of EU companies.
x The proposal on sustainable corporate governance will
include a horizontal and mandatory due diligence duty
requiring EU companies to identify, prevent, mitigate and
account for sustainability impacts in their own operations
and value chains, including as regards forced labour.
x The Commission is looking at feasible ways to translate
this commitment into concrete action.
Name of Cabinet Member: Skonieczna Agnieszka
Name of the Director who has cleared the briefing: Superti Valentina
BASIS request ID: CAB BRETON/1268
Room, time: 9/11/2021, 19:00-20:00
Participants: Commissioner Breton,
Name of main contact person:
Precision regarding “Tier 1”:
Tier 1 refers to direct suppliers/subcontractors in the
CVs of the interlocutors