New EU corporate due diligence law is a big deal… and opportunity
Ears up people, this is huge, especially if your business trades internationally… or wants to.
What’s happened? On 1 June, after a great deal of shouting, tears and treachery, the European Parliament finally passed a new due diligence law that will make companies accountable for people and planet, as well as profit. Crucially, this includes a company’s supply chains; the sale, distribution, transport, storage and waste management of products and services.
On the surface, this doesn’t sound very sexy so if you read words like ‘EU new due diligence law’ and immediately glazed over and went in search of hilarious cat videos, we kinda don’t blame you but this IS sexy and fabulous so please hang on in there as we explain it a little more.
Armageddon Diverted… hopefully
Its official name is the Corporate Sustainability Due Diligence Directive and it is a crucial piece of legislation that will help ensure larger companies are held to higher human rights and environmental standards.
And my goodness, there was an epic battle between good and evil to get this law passed.
Because the grasping fingers of the ‘greed is good’ economic policies of the 1970s are still clinging on for dear life to the rudder of the world’s steering wheel. But laws like this mean we are at last prising those avaricious fingers off the rudder, one by one.
Hopefully, just in the nick of time before we sail straight into self-induced climate crisis Armageddon.
And let’s just note here that the fact that making businesses commit to not causing environmental destruction and social injustice is even up for debate shows just how screwed up things are here on Planet Earth.
Anyway… this new EU law means companies will be accountable for human rights and environmental violations along their supply chains. If you’re a B Corp, you’ll already be very familiar with the idea and process of getting transparency in your supply chain. For most companies, it’s a new concept but we predict it will very swiftly become crucial if you want to keep doing business. #becomeaBCorp
Winds of change
All going well, the version passed by the EU parliament will now be reconciled with those being considered by the EU Council and the EU Commission, before a final text on the legislation is produced later this year.
Ultimately, legislative changes like this are coming thick and fast. The world is realising that shareholder primacy capitalism is a recipe for the disaster that is now unfolding.
By shifting to stakeholder capitalism, which is the premise of the B Corp movement, we are redefining what it means to be successful in business. Which means it will no longer be possible for a business to call itself ‘successful’ if its products or services leave a swathe of pollution or drive social injustice.
Hurray.
As well, there is a big opportunity here. If you can show that you’re a sustainable business, for example by sporting a certification such as B Corp, other companies that need to clean up their own supply chains will be clamouring to do business with you.
Yours in purpose,
Tamara
Are you Ready to B Better?
Ready to take the plunge towards becoming a B Corp business? Let the Grow Good team guide you through the process either through 1:1 coaching or group coaching on one of our regular cohort programmes for micro businesses. Book a 30-min discovery call with Tamara here.