Abstract The paper examines the rise and recent contestation of sustainability due diligence as a new policy instrument for governing corporate conduct in global value chains. Emerging from decades of voluntary sustainability initiatives, due diligence has evolved into a regulatory approach that translates international commitments with regard to sustainability directly into corporate obligations, enabling regulators to govern across borders. These developments appeared to constitute a significant shift in sustainability governance enabling the further pursuit of “smart mix” policies which combine public and private governance instruments. Yet, mounting geopolitical tensions and deregulatory pressures have triggered significant political pushback against sustainability regulation. The paper illustrates this pushback by focusing on the EU’s Corporate Sustainability Due Diligence Directive which has been substantially weakened. The paper argues that this retrenchment risks undermining long-term sustainability objectives and placing firms in an increasingly complex regulatory environment. It concludes by outlining implications for international business and reflections on the liberal international order in a post-globalization context.
Axel Marx (Tue,) studied this question.