Corporate Sustainability Due Diligence and the New Boundaries of the Firms in the European Union

To support the policies provided by the Action Plan on Financing Sustainable Growth and the European Green Deal, an intense activity of revising and updating European rules applicable to the business sector has been undertaken. EU Institutions tried to achieve the shift toward an inclusive and sustainable economy mainly indirectly, through soft law or reporting requirements and regulation of financial markets. In 2020 the Commission launched complementary initiatives in the field of company law to tackle the problem from an ex-ante perspective and in February 2022, a proposal for a directive on Corporate Sustainability Due Diligence has been published. The core of the proposal is to foster sustainable and responsible corporate behavior throughout global value chain by providing a general due diligence duty for companies and directors, but it also includes other provisions linked to a broader sustainable corporate governanceproject. It provides obligations related to climate change targets and tries to harmonise some aspects of directors’ fiduciary duties in European companies. After an analysis of the content of the proposal, this study stresses the emergence of a policy shift from self-regulation to statutes in the field of private procurement and the impact of sustainability on the boundaries of the firm.