Mandatory corporate sustainability due diligence and its limitations: the persistence of unequal exchange

Riccardo Fornasari and Vincenzo Maccarrone

Chapter 5 in Critical Political Economy of the European Polycrisis, 2025, pp 62-75 from Edward Elgar Publishing

Abstract: Global value chains are the main contemporary sites where workers’ exploitation and environmental degradation occur. In 2024, the EU approved the Corporate Sustainability Due Diligence Directive (CSDDD), which aims to make large companies perform due diligence in their value chains to prevent violations of human, environmental, and labour rights. Notably, this law does not apply only to EU companies but to all large transnational companies operating within the EU. In this chapter, we analyse the CSDDD from a world-system perspective, assessing whether it might address the unequal exchange between core and peripheral countries. As the CSDDD aims to enhance the respect of human rights, labour rights, and to fight climate change, it would jeopardize two of the pillars of unequal exchange, cheap labour, and cheap nature. However, we show that the law suffers from structural limitations, which will make it unlikely that this will happen. In turn, these limitations are linked to entrenched capital interests, which has limited the reach of regulation.

Keywords: Unequal exchange; Unequal ecological exchange; Corporate sustainability due diligence; World-system; European governance; Global value chains (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035347933
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