The Corporate Sustainability Due Diligence Directive being proposed by the European Commission will require companies to look into their current operational practices and processes.
Do we know what the Corporate Sustainability Due Diligence Directive (CSDDD) is all about? Out there, there is a mix up:
1. Some are thinking that ESGs are an extension of CSR.
2. Some are thinking that it is on a voluntary basis.
3. Some are thinking that it is still too early to start thinking of what needs to be done to implement it within their business processes.
4. Some are thinking that their business is outside the scope of the directive.
More clarity and information dissemination is needed.
We, The Malta Chamber are totally in favour of creating long-term value through approaches that incorporate environmental, social and governance (ESG) dimensions, in addition to economic ones. However, there are a number of aspects which emanate from the Directive and in respect of which we need clear clarity and in no uncertain terms.
1. Whether it is applicable at individual company level or at corporate level
2. More clarity is required on jurisdiction with respect to the procedures and requirements applicable
3. Clear demarcation between the value chain and supply chain
4. What will happen if one of the countries with whom business is transacting makes it close to impossible to analyse the value chain
5. Lack of qualified assessors
The success or otherwise of this directive will depend on whether the EU institutions and national governments acknowledge and take into account the actual current preparedness level of our companies. It needs to be acknowledged that businesses are trying to catch a moving train. Targets imposed need to be attainable. It is also important to ensure that compliance translates into elevated standards and steers away from meaningless reporting which leaves little scope beyond paper reporting. The success or otherwise of this Directive will depend on whether it will be a driver for growth and competitiveness or whether it will be just another law which creates unnecessary impediments and excessive unjustified costs.