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Estonia joins other EU member states in skepticism over corporate sustainability directive

Kalle Laanet (Reform).
Kalle Laanet (Reform). Source: Priit Mürk/ERR

As is the case with its northern neighbor Finland, the Estonian state considers problematic the European Union Corporate Sustainability Due Diligence Directive (CSDDD).

The CSDDD if passed would require companies to identify, prevent, mitigate and end environmental harms and human rights violations within their own value chains.

The directive is the subject of discussion at Committee of the Permanent Representatives of the Governments of the Member States to the European Union (Coreper) level on Friday, and is considered by some participants to be problematic.

The World Wildlife Fund (WWF) reports that Friday's meeting is crucial so far as the CSDDD goes, as it would determine whether the EU can secure the law here. If not, the four-year legislative effort to establish it may have come to nothing.

Minister of Justice Kalle Laanet (Reform) says the main factor here is that rules which would arise from the directive are unclear, while it is also not clear what obligations and accompanying responsibility would fall on the shoulders of entrepreneurs.

Laanet said: "We should protect our common values within the EU, and not be creating excessive bureaucracy."

According to Laanet, Estonia has no doubts about the necessity of respecting human rights and protecting the environment with relation to economic activities, but added this must be done via clear regulations that can also justify the accompanying administrative burden on the state and on business.

"Unfortunately, the CSDDD does not meet these criteria, meaning Estonia cannot support this either," adding that Estonia would abstain from the vote at the Coreper session today, Friday.

Among other things, the Estonian state considers interference with the principles of company law, the very broad and vague definition of due diligence obligations and the application of civil liability in cases of violation of such obligations to be the most problematic aspects of the CSDDD.

Forbes reports that Finland has joined Germany in expressing its intent to abstain from a council vote on Friday.

Estonian Uku Lilleväli, sustainable finance policy officer at the WWF European Policy Office, asked ahead of the meeting: "Will the EU help its businesses transition to more risk-resilient and less harmful business models, or will it succumb to misleading notions that competitiveness necessitates the liberty to trample on human rights and the planet?

"The credibility of the [European] Commission, council and parliament – ultimately of the entire EU – is at stake," he added.

Meeting on a weekly basis, Coreper is the Council of the European Union's main preparatory body, and is not an EU decision-making body.

It is composed of permanent representatives from each member state, who, in effect, are their country's ambassadors to the EU and who express the position of their government.

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Editor: Andrew Whyte, Aleksander Krjukov

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