Corporate Sustainability and the Duty of Care of Directors

• Article 25 of the proposed CSDDD can have a signalling function and is in line with developments at national as well as EU level.
• The proposed provision does however lead to a need for further clarification when applied to company groups this is due to the fact that it is combined in a proposed directive on due diligence.
• It may be advised to align the scope of application of the duty with the scope of the CSRD.

Article 25 of the proposed CSDDD requires directors to take into account the consequences of their decisions for sustainability matters. While the use of directors’ duties as a tool to promote sustainability has been proposed in the past, it has also been criticized. This debate will be explored in this article. It will be argued that even though the introduction of sustainability into directors’ duties will not solve all problems, it should not be overlooked as one of the tools to enhance long-term sustainable decision-making. It is not new since it builds upon the obligations contained in the recently adopted CSRD. Therefore, making this explicit in the duty of the board of directors does not change the content of their task. The fear of interference with directors’ duties at the national level should furthermore not be overstated as Article 25 leaves considerable freedom to Member States with regard to the implementation of this duty.