How WBA engages with policymakers towards ambitious goals like the EU Corporate Sustainability Due Diligence Directive

Given the wide array of data and corresponding insights published by WBA, it is important to consider where and how best to use them to influence policy discussions positively.

Considering the direction of existing political winds and contributing to ongoing policy debates is one way to exert a significant impact. The EU Corporate Sustainability Due Diligence Directive (CSDDD) presented one such political opportunity. The goal of CSDDD was to translate the existing United Nations Guiding Principles on Business and Human Rights (UNGPs) and OECD Guidelines for Multinational Enterprises on Responsible Business Conduct (OECD Guidelines) into law. WBA’s Corporate Human Rights Benchmark (CHRB) has already assessed adherence to the UNGPs/OECD Guidelines. It was, therefore, logical for WBA to provide data and insights relevant to the CSDDD debate.

Furthermore, our analysis showed that over half of WBA’s SDG2000 companies are likely to be included in the scope of CSDDD. This would mean that the final legislative outcome of the bill would directly impact the results of our next benchmark analysis. We were well placed to provide expertise on issues within the scope of the law, including the often significant burden placed on suppliers and smallholders to fulfil the due diligence requirements imposed by major companies in the value chain.

Throughout the CSDDD negotiations, WBA provided data to support key policy asks as well as comments to the media emphasising the importance of corporate accountability. We positioned ourselves as supporters of this legislation that would address the gaps in company sustainability performance we had already identified in our benchmark data. This data-based position allowed us to provide an objective reasoning for supporting this government policy.

Practically, this policy work was made possible by organising meetings with key European Commission officials, Member State negotiators and Members of the European Parliament. We built on our existing network, as well as working closely with key CSOs such as PRI, the Investor Alliance for Human Rights, the Institutional Investor Group of Climate Change, the European Coalition for Corporate Justice and others, to ensure our engagement had as much impact as possible.

The key elements of CSDDD that WBA emphasised were:

• The inclusion of financial institutions within the scope of CSDDD.
• The obligation for companies to produce a credible climate transition plan.
• The need for stakeholder consultation to be embedded as part of the overall due diligence obligation.

Though our involvement with CSDDD was one of WBA’s most comprehensive and consistently impactful policy engagements, one of the key challenges that we faced was ideologically motivated political opposition from conservative parliament members who could not be persuaded even when presented with clear data-driven evidence. While our data is the backbone of WBA, it must be accompanied by tailored packaging and narrative geared towards diverse voices within the EU. This, however, makes such engagement extremely time-consuming and limits WBA’s bandwidth for engaging in other initiatives. It was nonetheless heartening to see more large and impactful companies coming out in support of the legislation throughout debates. This provided an opportunity for WBA to connect with these companies as part of our corporate engagement, with the goal of pushing them to raise the bar on sustainability. We also witnessed a shift in the narrative: from giving voluntary measures a chance to a belief in the importance of embedding corporate accountability into legislation.

These concrete examples of WBA interventions further illustrate our involvement in the process:

• A press narrative publicly supporting corporate accountability legislation: The first draft of a political agreement came about on 15 December. WBA shared comments to the press welcoming the introduction of mandatory due diligence as part of the bill. Our comments were featured in the Financial Times, Euractiv and Reuters, among others.
• Working with Allies to promote key insights: WBA worked with the Danish Institute for Human Rights and the Luxembourg-based Initiative pour un devoir de vigilance to publish, on 12 December 2023, shared insights on how financial institutions are struggling to show respect for human rights. These insights were accompanied by a specific policy ask: that EU policymakers ensure financial institutions meet minimum expectations on human rights by including f inancial institutions in the scope of CSDDD.
• Highlighting undue risk to smallholders and suppliers: On 6 December, WBA published a blog calling for EU legislators to place the people impacted by corporate behaviour, as well as smallholders, at the centre of incoming corporate accountability legislation. This blog highlighted key insights from CHRB, showing that most companies - more than half, or 55% - fail to include rightsholders in their human rights due diligence processes. Suppliers are often set up to fail by larger companies who do not live up to their responsibilities. This blog was widely disseminated to key EU policymakers.

Our benchmark methodologies and results clearly have the potential to help steer governments towards policies that incentivise businesses to contribute more to a sustainable future. As we have detailed in this article and our 2023 Annual Report, this can be done by engaging with key stakeholders during the design, drafting, and application of such policies.