Corporate due diligence and corporate accountability Annex: An estimation of the economic impact of Environmental, Social and Governance due diligence and corporate accountability for EU companies. A firm-level analysis

There is evidence of human rights violations and negative environmental impacts related to business activities, including of EU companies. Several actions have been taken at both international and EU level to promote responsible business conduct and to prevent such violations. While being important steps forward, these initiatives suffer from several limitations, as they are either voluntary, sector-specific, or limited to reporting obligations. The EU is committed to upholding human rights and environmental protection, and has the competence to harmonise national company law to ensure the proper functioning of the single market. This study analyses the European added value of a potential measure requiring companies to carry out due diligence on possible social and environmental risks in their operations and supply chains. It analyses why action should be taken at the EU level and points to its potential impacts from the perspective of both EU companies and society at large.