Towards inclusive European CSR legislation : Analysing the impacts of the EU corporate sustainability directive on LDC trade
Komba, Neema; Annala Tesfaye, Linda; Nilsson, Eva; Solitander, Nikodemus; Trommer, Silke; Verbrugge, Boris; Andersson, Greta (2023-03-27)
Annala Tesfaye, Linda
Julkaisusarja:Publications of the Ministry for Foreign Affairs 2023:5
This publication is copyrighted. You may download, display and print it for Your own personal use. Commercial use is prohibited.
Julkaisun pysyvä osoite onhttp://urn.fi/URN:ISBN:978-952-281-374-9
In 2022, the European Commission adopted the proposal for the corporate sustainability due diligence directive to advance the green transition and protect human rights in the EU and beyond. The proposed new directive would compel EU companies of substantial size and economic power, as well as companies in identified high-impact sectors that operate in the EU to identify, prevent and mitigate the adverse impacts of their activities on human rights and the environment. This study draws from the literature on corporate social responsibility in global value chains, non-tariff measures, and inclusive trade, as well as insights from the Ethiopian garments industry and the Tanzanian coffee sector to analyse the potential impacts of this directive on least developed countries’ value chains and trade with the EU. Although the directive only directly applies to larger companies operating in the EU, this study highlights the likelihood of the directive’s far-reaching impacts on small-scale suppliers, small-holder farmers, workers, and communities in the least developed countries. The study offers recommendations to address the shortcomings of the directive as well as the accompanying measures to European governments to minimise unintended impacts and promote inclusive trade between the EU and least developed countries.
This report is commissioned as part of UniPID Development Policy Studies (UniPID DPS), funded by the Ministry for Foreign Affairs of Finland (MFA) and managed by the Finnish University Partnership for International Development (UniPID). UniPID is a network of Finnish universities established to strengthen universities’ global responsibility and collaboration with partners from the Global South, in support of sustainable development. The UniPID DPS instrument strengthens knowledge-based development policy by identifying the most suitable available researchers to respond to the timely knowledge needs of the MFA and by facilitating a framework for dialogue between researchers and ministry officials. The content of this report does not reflect the official opinion of the Ministry for Foreign Affairs of Finland. The responsibility for the information and views expressed in the report lies entirely with the authors.