Enforcing Due Diligence Obligations
The Corporate Sustainability Due Diligence Directive creates an innovative mix of enforcement mechanisms. It relies on both administrative oversight and judicial enforcement through civil liability. Additionally, accountability of businesses for affecting stakeholder interests is strengthened by a specific environmental, social, and corporate governance duty of care for directors and obligations to link directors’ pay to climate obligations, thus ensuring that directors need to steer businesses in light of stakeholder interests. This system has the potential to effectively oblige companies to respect stakeholder interests, although some weaknesses, especially in access to justice, remain.
