Government supports Commission’s proposed legislation on corporate social responsibility

The European Commission published its proposal for EU corporate social responsibility legislation on 23 February 2022. Today, the Government submitted its view on the Commission’s proposal to Parliament. The Government considers the proposal important and supports it in key respects, but also emphasises that the regulation must be clear and that companies must have realistic opportunities to comply with the proposed obligations.

On 5 May 2022, the Government submitted a Union communication to Parliament on the proposed corporate social responsibility legislation, which would lay down rules on EU companies’ due diligence obligation regarding sustainable business operations.

The Government supports the key elements of the proposal and considers the underlying objectives of sustainable development, respect for human rights and environmental protection important. The proposal harmonises regulation of companies operating in the EU and aims to ensure a level playing field for them. 

It is important to the Government that the negotiations on the Directive proceed and that the regulation enters into force in the Union in the next few years. The proposed Directive supports the Government Programme’s objectives of promoting corporate social responsibility.

Regulation must be clear and understandable 

The Government stresses that the regulation must define clearly and precisely the obligations imposed on companies. The Government supports the proposed scope of application, i.e. the types of companies that the legislation covers. SMEs operate as part of large companies’ value chains and they should not be subject to unreasonable obligations.

The proposed directive would also contain provisions on the legal consequences to companies of any breaches of the legislation. In the Government’s view, these consequences should focus on supervision by the authorities and administrative sanctions rather than compensation mechanisms. Meanwhile, the provisions on due diligence obligations regarding corporate management should be removed from the proposal, according to the Government. 

Inquiries:
Piritta Jokelainen, Special Adviser to the Minister of Employment, tel. 0295 047 353
Liisa Huhtala, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel.  +358 295 047 028 
Sami Teräväinen, Senior Specialist, Legal Affairs, Ministry of Economic Affairs and Employment, tel. +358 295 060 088