Corporate governance and the Corporate Sustainability Due Diligence Directive

Barnali Choudhury

Chapter 41 in Sustainable Business in Europe, 2026, pp 549-566 from Edward Elgar Publishing

Abstract: This contribution examines the Corporate Sustainability Due Diligence Directive (CSDDD) through a corporate governance lens, evaluating its potential to advance the European Union's sustainability goals. While the Directive marks a significant step in mandating human rights and environmental due diligence, its impacts on corporate governance are mixed. The Directive successfully challenges traditional company law principle and extends corporate accountability across global supply chains, including extraterritorially. However, it falls short in three key areas: defining corporate purpose, incorporating directors’ duties related to sustainability, and ensuring effective liability mechanisms. Without these governance pillars, the Directive is unlikely to transform corporate behaviour in ways that contribute meaningfully to a just and sustainable transition. Instead, it may merely deter harm, rather than drive proactive sustainability efforts. The chapter concludes that while the CSDDD is a notable advancement, further reforms are necessary to align corporate governance with the EU's ambitious sustainability objectives.

Keywords: Corporate Governance; Sustainability; Directors’ Duties; Corporate Purpose; Board Oversight; Shareholders; Limited Liability; Separate Legal Personality (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035326891
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