May 21, 2026
This essay is part of Shift’s series marking the 15th anniversary of the UN Guiding Principles on Business and Human Rights.
By Heidi Hautala*
It was the honour of my life as an EU lawmaker to get to know John Ruggie. He saw the remarkable opportunity to achieve in the EU what he called a “smart mix” of voluntary and mandatory measures in the implementation of UN Guiding Principles of Business and Human Rights (UNGPs). As his disappointment in the EU’s initial lack of action shifted to optimism, his engagement in the work towards mandatory and cross-cutting human rights due diligence was important and influential.
The long struggle to establish mandatory human rights due diligence in EU law culminated in the Corporate Sustainability Due Diligence Directive (CSDDD). Although the final version reflects many dilutions and compromises, most importantly it preserves the core element of the risk-based due diligence process. This is testimony to the strong foundations provided by the UNGPs and the existing buy-in to the benefits of the risk-based approach, built through years of experience implementing the international standards.
The approach set out by the UNGPs made sense to me from day one: while states would remain the main duty bearers to protect human rights, companies would have the responsibility to respect human rights. And crucially, victims of corporate abuse must have access to justice and remedy. These three pillars of the UN Guiding Principles of Business and Human Rights are simple and revolutionary. Fifteen years after the unanimous vote in the UN Human Rights Council, companies cannot simply say they were following local laws if their business is connected with serious human rights violations and damage to the environment.
Laying the groundwork for EU due diligence law
Following the UN’s endorsement of the UNGPs in 2011, a steadily growing number of EU Member States adopted National Action Plans to implement them. As an EU lawmaker focused on human rights, it caught my attention that the EU itself had not set itself such an action plan. That needed to change.
A small number of Members of the European Parliament across party lines established an informal Responsible Business Conduct working group. With significant engagement from key Brussels NGOs, the working group produced and presented a Shadow EU Action Plan on the implementation of the UNGPs within the EU (2019-2024). The best asset of this informal working group was its convening power, which made it an important hub for contacts between all relevant stakeholders.
This Shadow Action Plan called on EU institutions to “take on a leading role in the implementation of the UNGPs”. It argued that it was “time for the EU, which is directly bound by its treaties to promote and protect human rights globally, to take action. The EU is the world’s largest economy, a trading hub with significant economic and political power to influence the regulation of economic operations worldwide.”
The Shadow Action Plan was a detailed roadmap for establishing mandatory human rights and environmental due diligence requirements for companies operating in the EU, regardless of where they were headquartered. It was the prelude to the hard-fought Corporate Sustainability Due Diligence Directive (CSDDD). For the victims of corporate abuse, the promise of such a law was a beacon of hope far beyond the EU’s borders.
Turning voluntary guidelines into enforceable legislation has many challenges, not least in terms of legal clarity. The French law on human rights due diligence (loi relative au devoir de vigilance) of 2017 was proof that designing mandatory legislation was possible and politically achievable. Support and inspiration from French lawmakers and civil society was very important on the way towards our goal in the EU. Soon after, Germany started to conceive of a similar national law which would emerge in 2021 (Lieferkettengesetz). The ability to compare notes informally with German government officials was also very helpful to EU parliamentarians.
What really mattered, however, was the truly exceptional coalition of NGOs, trade unions, companies, academics and even representatives of international organizations who worked, and would continue to work, together throughout the process that ensued.
In the fall of 2019, following the EU elections and its new mandate, the European Parliament called on the Commissioner designates to commit to putting in place the smart mix foreseen in the UNGPs.
A milestone event took place in December 2019 hosted by the Finnish Council Presidency together with Shift. John Ruggie agreed to participate in the conference and in his address he explained what business and human rights means: “In big-picture terms, it is about the social sustainability of globalization… Today, people around the world are telling us that we have fallen short, that the benefits and burdens of globalization have been unequally distributed within and among nations. The result is public resentment and loss of trust in institutions of all kinds.” A poignant message which feels just as relevant today.
The CSDDD takes shape
The stars were aligned for the creation of the CSDDD. In 2019 the new Commission President Ursula von der Leyen had declared the EU Green Deal, and in April 2020 the directive was announced. The European Parliament had a favorable majority from center right to center left. The Green Deal was mainly an EU internal set of climate and sustainability goals and instruments. The CSDDD represented its external dimension and turned the attention to adverse human rights and environmental impacts in global value chains.
John Ruggie’s important support to the EU project continued. Alignment with the recognized international standards – the UNGPs and OECD Guidelines – was the North Star from the start of that initial round of formal negotiations on the CSDDD, which lasted from 2022 to 2023. A compromise was reached between the European Parliament and EU Member States during a dark December night in Strasbourg, the seat of the European Parliament. Was the compromise satisfactory, if not perfect? By far most of those who had fought for it thought so.
The groundbreaking nature of the EU CSDDD was seen in the high expectations, far beyond the EU, of its potential to substantially reduce corporate human rights violations. Unfortunately, it faced fierce and powerful opposition. Many companies, banks and business associations, as well as some EU Member States, could not accept the agreement on the corporate responsibility to conduct due diligence, which came with enforcement and liability.
Pressure from the larger Member States in particular resulted in the unprecedented reopening of the legislative compromise that had been reached. This led to a drastic reduction of the number of companies in its scope. Obligations of the finance sector were further limited. Representative actions on behalf of victims were no longer included in the directive. But in July 2024 the CSDDD was finally official. Despite all of the concessions made, there was big sigh of relief from all who had fought to ensure mandatory human rights and environmental due diligence for businesses in the EU.
Political backlash and renewed negotiations
But who could have anticipated that the battle was not over? The political climate that had enabled the EU Green Deal was blown away by the election results of June 2024 and consequently by a new right-leaning majority.
The second Commission led by Ursula von der Leyen declared that simplification of the legislation would be a top priority to reduce any administrative burden on companies. And just a few months later, she spoke about deregulation, not only simplification. The CSDDD and the Corporate Sustainability Reporting Directive (CSRD) became the first target, in the so-called ‘Omnibus I’.
Too little attention has been given to the narrative that framed this move towards EU deregulation. It will be important for political and social scientists to analyze the claim that the EU economy’s lack of competitiveness is largely due to overregulation, in particular in sustainability and corporate accountability. Already in April 2021, John Ruggie had critiqued the position of “governments … [that] think that they are doing business a favor by not regulating even the most egregious behavior”.1
Foreign influence had meanwhile become more aggressive. The second Trump administration gave its vocal support to leading US companies, spearheaded by Exxon-Mobil, calling for the EU CSDDD to be repealed. The US together with Qatar formally threatened to deny the EU access to their energy sources such as LNG from Qatar. An elaborate lobbying campaign on behalf of some ten – mainly US – companies was revealed by SOMO, a Dutch NGO close to trade unions.
The European Parliament seemed to be subject to unprecedented corporate capture. A sharp sign of this was the resignation from the Parliament’s negotiating team of MEP Lara Wolters who had so successfully led the negotiations for the original CSDDD.
After many months of renewed negotiations, the revised CSDDD and Corporate Sustainability Reporting Directive (CSRD) were adopted at the end of 2025. The final compromise was an agreement between the center-right and far-right forces in the Parliament. The number of companies in the scope of CSDDD was further reduced, raising the threshold to 5000 employees, copy-pasted from the French law. For the CSRD, it was set at 1000 employees. Meaningful stakeholder engagement no longer included civil society and national human rights institutions. A harmonized EU approach to civil liability was removed: now close to 30 national civil liability laws would apply. Certainly this was not a simplification for companies, nor for victims seeking justice. But both the personal scope and civil liability rules will be under review in 2031 – by which time a more favorable political majority will hopefully be in place.
The loss of important provisions of the CSDDD through the renegotiations could have emptied the law of its meaning. But – against the odds – one serious loss was prevented that mattered more than all those that were not: the risk-based approach to due diligence, firmly present in the original CSDDD and based on the UNGPs, was brought back in the final round of Omnibus negotiations.
Many companies, other stakeholders and experts had worked hard to save this central characteristic of a meaningful due diligence process. The national due diligence law in Germany had already shown how insufficient and cumbersome the proposed alternative – focusing on tier one direct partners and suppliers – would have been. The return of the risk-based approach across all tiers of the supply chain showed how strong the foundations provided by the UNGPs were. The existing buy-in to the benefits of the risk-based approach, built through years of practical experience, helped to ensure that this core content remained intact.
Moving forward with risk-based due diligence
Undoubtedly the Business and Human Rights agenda is in evolution. As we look at the state of play today, it is clear that the headwinds against sustainability regulation were not strong enough to destroy the CSDDD and its foundations in the human rights due diligence concept set forth in the UNGPs. Many see the current backlash as a bump in the road rather than a sign of permanent decline. And meanwhile similar legislative initiatives are emerging from Switzerland to South-East Asia.
With the CSDDD set to come into force in 2029, frontrunning companies will not wait, but will use the lead time to develop good practice. Cooperation across companies, civil society, trade unions and international institutions will be needed as much in the implementation of the CSDDD as it was in the early days of the UNGPs. Multistakeholder initiatives will be essential to help companies address common issues and impacts.
As these efforts progress, the UNGPs remain the single best compass, helping all actors ensure that the measures they pursue are both workable for companies and can deliver meaningful improvements in the lives of workers, communities and consumers.
And so the work continues.
*Heidi Hautala is a former member and Vice-president of the European Parliament and former Minister for International Development and State Ownership Steering in Finland. She played a key role in initiating the Corporate Sustainability Due Diligence Directive in the EU. She is special adviser to Global Business Initiative on Human Rights and adviser to the board of UN Global Compact Finland. She is also a board member of Business & Human Rights Resource Centre, Fair Trade Advocacy Office and FERN and a member of amfori Stakeholder Advisory Council.
1 https://heidihautala.com/fi/in-the-memory-of-john-ruggie-the-founding-father-of-the-un-guiding-principles-on-business-and-human-rights/
