The French Government is reportedly poised to propose a comprehensive deregulation strategy, which includes an indefinite suspension of the Corporate Sustainability Due Diligence Directive's (CSDDD) enforcement and challenges significant portions of the directive.

This development was cited in a report disclosed by Politico and Mediapart that suggests France’s indefinite deferral proposal for the EU’s CSDDD would be represented by Economy Minister Eric Lombard in Brussels. 

The report reveals the French administration would also suggest raising thresholds for application, and even consider eliminating provisions that could later regulate financial sector activities.  

This plea from France coincides with Brussels’ commitment to alleviate the regulatory load on companies that have voiced concerns over what they perceive as undue bureaucracy, as the 27-member union endeavours to enhance its economic competitiveness. 

Proposed by the EC in February 2022 and ratified last March, the CSDDD requires companies to identify, assess, prevent, mitigate, and remedy impacts on people and the environment, including issues like child labour, pollution, deforestation, and ecosystem damage, throughout their supply chain and certain downstream activities, such as distribution and recycling. 

French European Affairs Minister Benjamin Haddad articulated this request from Paris, emphasising the need for procedural simplification over additional administrative encumbrances, according to local news publication France 24.  

Haddad has called for a reassessment of another suite of corporate sustainability reporting standards that have been met with opposition from various European business advocacy groups. 

Moreover, Haddad has advocated for a re-evaluation of the Corporate Sustainability Reporting Directive (CSRD), which obligates large corporations to disclose information pertaining to their climate impact, emissions, and mitigation efforts to investors and other stakeholders.  

The EU is currently grappling with a multitude of challenges, including suboptimal productivity, sluggish growth, elevated energy expenditures and lacklustre investments.  

These issues are compounded by the pressure to keep pace with the US and the intensifying rivalry from China.  

While addressing a global assembly in Davos, Switzerland, European Commission president Ursula von der Leyen asserted there is an imperative to substantially streamline business operations across Europe. 

“Too many firms are holding back investment in Europe because of unnecessary red tape,” said Von der Leyen, according to the publication. 

She announced plans for comprehensive simplification efforts by the commission. This includes revisiting “due diligence” mandates akin to those France is now seeking to suspend. 

Nine humanitarian and ecological organisations, among them Oxfam France and Bloom, have criticised Paris for advocating a postponement, a move they believe could jeopardise the implementation of essential laws aimed at addressing climate and societal issues. 

“This French position is simply incompatible with the European climate objectives,” the NGOs said. 

Last month, over 160 European associations and trade unions reaffirmed their opposition to any challenges against European Sustainable Finance legislation. 

Meanwhile, a newly released handbook by Policy Hub, the Social and Labor Convergence Program, Fair Wear Foundation, and amfori emphasised the need for clear and practical guidelines to implement the EU’s CSDDD within the textile industry. 

 By Just Style