GCC states warn of implications of EU's proposed Corporate Sustainability Due Diligence Legislation

Riyadh: The Gulf Cooperation Council (GCC) states expressed their deep concern regarding the two directives known as the Corporate Sustainability Due...

Riyadh: The Gulf Cooperation Council (GCC) states expressed their deep concern regarding the two directives known as the Corporate Sustainability Due Diligence Directive and the Corporate Sustainability Reporting Directive, for which a package of amendments was recently submitted by the European Parliament to the trilogue negotiations.

The GCC States stressed that their concern arises from the fact that the proposed legislation would require major European and international companies to follow the European Union's own definition of sustainability. It would further oblige these companies to comply with legislation related to human rights and environment, and to submit climate plans that go beyond the obligations established under international climate agreements.

In addition, companies would be required to report on the sustainability impacts of their operations and would be subject to penalties for non-compliance.

The GCC States further noted that, despite the simplifications proposed by the European Parliament, aimed at alleviating the burdens of certain provisions and removing others, these changes still fall short of the GCC States' expectations and continue to constitute a source of harm and a potential source of wide-ranging risks to the interests of GCC companies operating in the European market. This is particularly concerning in light of the new regulatory environment the legislation would establish, which could negatively affect the competitiveness and continuity of those companies' operations.

The GCC States affirmed that they continue to pursue their efforts as active participants in all United Nations bodies concerned with human rights, the environment, and climate change, and that they have aligned their national legislation with the principles of these organizations while safeguarding their sovereign rights. They also submit their reports with full transparency, on a regular and consistent basis, across various international fora and conferences under the auspices of the United Nations. This commitment is reflected in their accession to the Paris Agreement and the United Nations Framework Convention on Climate Change, as well as in their adoption of national regulations to protect the environment and regulate emissions, and their participation in the Universal Periodic Review (UPR) mechanisms on human rights.