Riyadh: The Gulf Cooperation Council (GCC) States, comprising the United Arab Emirates, the Kingdom of Bahrain, the Kingdom of Saudi Arabia, the Sultanate of Oman, the State of Qatar, and the State of Kuwait, have expressed deep concern regarding two directives known as the Corporate Sustainability Due Diligence Directive and the Corporate Sustainability Reporting Directive. These directives are currently under consideration, with a package of amendments recently submitted by the European Parliament to the trilogue negotiations.
According to Saudi Press Agency, the GCC States stressed that their concern arises from the fact that the proposed Corporate Sustainability Due Diligence Directive would require major European and international companies to adhere to the European Union's definition of sustainability. This directive would also obligate companies to comply with EU-specific human rights and environmental legislation, submit climate-related transition plans exceeding international climate agreement obligations, and report on the sustainability impacts of their operations. Companies failing to comply would face penalties.
The GCC States further noted that, despite the simplifications proposed by the European Parliament aimed at alleviating the burdens of certain provisions and removing others, these changes still fall short of the GCC States' expectations. They continue to regard the directives as a potential source of harm and risk to the interests of GCC companies operating in the European market. The new regulatory environment could negatively affect the competitiveness and continuity of these companies' operations.
The GCC States affirmed their commitment to active participation in all United Nations bodies concerning human rights, the environment, and climate change. They have aligned their national legislation with these organizations' principles while safeguarding their sovereign rights. Reports are submitted with full transparency, regularly and consistently, across various international fora under the United Nations. This commitment is reflected in their accession to the Paris Agreement and the United Nations Framework Convention on Climate Change. They have also adopted national regulations to protect the environment and regulate emissions and participate in the Universal Periodic Review mechanisms on human rights.
The GCC States emphasized that, despite efforts to fulfill obligations to the international community and the European Union, ensuring reliable and dependable energy supplies to Europe, ongoing discussions and negotiations among EU institutions on this legislation could negatively impact the continuity of those supplies.
The GCC States concluded by noting that GCC companies potentially subject to this legislation, which operate in line with global best practices, will assess the risks and impacts they could face if the legislation is adopted. Such assessments may lead these companies to withdraw from the European market and seek alternative markets.
The GCC States expressed hope that the European Union's friendly countries will consider cancelling the proposed directive or limiting its application within the EU to avoid cross-border effects if the EU proceeds with it.