The environmental material scope defined in Parts I and II of the Annex

Amandine Van Den Berghe, Julia Otten and Virginie Rouas

Chapter Annex 2 in Sustainable Business in Europe, 2026, pp 454-472 from Edward Elgar Publishing

Abstract: As part of their due diligence obligations under the CSDDD, companies must identify, assess, prevent, end, and remediate adverse environmental impacts. An adverse environmental impact is defined by the directive as an adverse impact on the environment resulting from the breach of international human rights and environmental prohibitions and obligations listed in its Annex. As a result, the CSDDD's Annex is critical in defining the directive's normative environmental scope. This commentary discusses the Annex's environmental content. It first examines adverse environmental impacts with human rights implications before analysing international environmental prohibitions and obligations. The CSDDD's approach to defining environmental impacts has been one of the most contentious aspects of the directive's negotiations. While the result exceeds existing corporate accountability legislation on some aspects, it falls short of international due diligence standards and related EU legislation. The limited list of international environmental prohibitions and obligations in Part II of the Annex restricts the range of adverse environmental impacts that companies must address to comply with their due diligence obligations. However, while maintaining an anthropocentric approach, the connection between environmental impacts and human rights impacts allows for a broader understanding of environmental due diligence and what constitutes a potential or actual impact on the environment. Environmental impacts that are not addressed by the instruments listed in Part II of the Annex can still be captured under such a nexus, and companies would be well-advised to take a holistic view of their impacts on the environment.

Keywords: Environmental Due Diligence; Material Scope; Annex; Adverse Environmental Impact; International Conventions (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035326891
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