### (50) in order to ensure that this directive effectively contributes to combating climate change , companies should adopt a plan to ensure that the business model and strategy of the company are compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °c in line with the paris agreement. in case climate is or should have been identified as a principal risk for or a principal impact of the company’s operations , the company should include emissions reduction objectives in its plan. ### (50) in order to ensure that this directive effectively contributes to combating climate change , companies should , in consultation with stakeholders , adopt a plan to ensure that the business model and strategy of the company are aligned with the transition to a sustainable economy and with the limiting of global warming to 1.5 °c in line with the paris agreement and with the objective of achieving climate neutrality by 2050 at the latest as established in regulation eu 2021/1119 (european climate law) , pursuant to the latest recommendations of the ipcc and the european scientific advisory board on climate change. the plan should include science-based targets related to climate objectives of 2030 and 2050 , avoiding any misleading claims on climate neutrality , an identification and explanation of decarbonisation levers identified within the company’s operations and value chain and the greenhouse gas emission reduction targets. the plans should include clear obligations for directors and board members to ensure that environmental and climate risks and impacts are addressed in the company’s strategy.


### (50) in order to ensure that this directive effectively contributes to combating climate change , companies should adopt a plan to ensure that the business model and strategy of the company are compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °c in line with the paris agreement. in case climate is or should have been identified as a principal risk for or a principal impact of the company’s operations , the company should include emissions reduction objectives in its plan. ### (50) in order to ensure that this directive effectively contributes to combating climate change , undertakings should , in consultation with stakeholders , adopt a plan to ensure that the business model and strategy of the undertaking are aligned with the transition to a sustainable economy and with the limiting of global warming to 1.5 °c in line with the paris agreement and with the objective of achieving climate neutrality by 2050 at the latest as established in regulation eu 2021/1119 (european climate law) , in line with the latest recommendations of the ipcc and the european scientific advisory board on climate change. the plan should include science-based targets related to climate objectives of 2030 and 2050 , avoiding any misleading claims on climate neutrality , an identification and explanation of decarbonisation levers identified within the undertaking’s operations and value chain and the greenhouse gas emission reduction targets. the plans should include clear obligations for directors and board members to ensure that environmental and climate risks and impacts are addressed in the undertaking’s strategy.


### (50) in order to ensure that this directive effectively contributes to combating climate change , companies should adopt a plan to ensure that the business model and strategy of the company are compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °c in line with the paris agreement. in case climate is or should have been identified as a principal risk for or a principal impact of the company’s operations , the company should include emissions reduction objectives in its plan. ### (50) in order to ensure that this directive effectively contributes to combating climate change , companies should adopt a plan to ensure that the business model and strategy of the company are compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °c in line with the paris agreement and with the eu climate objectives enshrined in the 'european climate law'.


### (50) in order to ensure that this directive effectively contributes to combating climate change , companies should adopt a plan to ensure that the business model and strategy of the company are compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °c in line with the paris agreement. in case climate is or should have been identified as a principal risk for or a principal impact of the company’s operations , the company should include emissions reduction objectives in its plan. ### (50) in order to ensure that this directive effectively contributes to combating climate change , companies should , in consultation with stakeholders , adopt a plan to ensure that the business model and strategy of the company are aligned with the transition to a sustainable economy and with the limiting of global warming to 1.5 °c in line with the paris agreement and with the objective of achieving climate neutrality by 2050 at the latest as established in regulation eu 2021/1119 (european climate law) , pursuant to the latest recommendations of the ipcc and the european scientific advisory board on climate change. accordingly , the company should include emissions reduction objectives in its plan.


### (51) with a view to ensure that such emission reduction plan is properly implemented and embedded in the financial incentives of directors , the plan should be duly taken into account when setting directors’ variable remuneration , if variable remuneration is linked to the contribution of a director to the company’s business strategy and long-term interests and sustainability. ### (51) the climate targets and transition plan should be properly implemented and embedded in the financial incentives of directors , the plan should be duly taken into account when setting directors’ variable remuneration , if variable remuneration is linked to the contribution of a director to the company’s business strategy and long-term interests and sustainability.


### (51) with a view to ensure that such emission reduction plan is properly implemented and embedded in the financial incentives of directors , the plan should be duly taken into account when setting directors’ variable remuneration , if variable remuneration is linked to the contribution of a director to the company’s business strategy and long-term interests and sustainability. ### (51) the climate targets and transition plan should be properly implemented and embedded in the financial incentives of directors , and should be duly taken into account when setting directors’ variable remuneration.


### (51) with a view to ensure that such emission reduction plan is properly implemented and embedded in the financial incentives of directors , the plan should be duly taken into account when setting directors’ variable remuneration , if variable remuneration is linked to the contribution of a director to the company’s business strategy and long-term interests and sustainability. ### (51) the climate targets and transition plan should be properly implemented and embedded in the financial incentives of directors , and be duly taken into account when setting directors’ variable remuneration.


### (56) in order to ensure effective compensation of victims of adverse impacts , member states should be required to lay down rules governing the civil liability of companies for damages arising due to its failure to comply with the due diligence process. the company should be liable for damages if they failed to comply with the obligations to prevent and mitigate potential adverse impacts or to bring actual impacts to an end and minimise their extent , and as a result of this failure an adverse impact that should have been identified , prevented , mitigated , brought to an end or its extent minimised through the appropriate measures occurred and led to damage. ### (56) in order to ensure effective compensation of victims of adverse impacts , member states should be required to lay down rules governing the civil liability of companies for damages arising due to its failure to comply with the due diligence process. the company should be liable for damages if they failed to comply with the obligations to prevent and mitigate potential adverse impacts or to bring actual impacts to an end and minimise their extent , and as a result of this failure an adverse impact that should have been identified , prevented , mitigated , brought to an end or its extent minimised through the appropriate measures occurred and led to damage. the company should also be liable for damages that result from adverse human rights , environmental or climate impacts that should have been identified , prevented , mitigated , brought to an end or their extent minimised by its subsidiaries.


### (56) in order to ensure effective compensation of victims of adverse impacts , member states should be required to lay down rules governing the civil liability of companies for damages arising due to its failure to comply with the due diligence process. the company should be liable for damages if they failed to comply with the obligations to prevent and mitigate potential adverse impacts or to bring actual impacts to an end and minimise their extent , and as a result of this failure an adverse impact that should have been identified , prevented , mitigated , brought to an end or its extent minimised through the appropriate measures occurred and led to damage. ### (56) in order to ensure effective compensation of victims of adverse impacts , member states should be required to lay down rules governing the civil liability of undertakings for damages arising due to its failure to comply with the due diligence process. the undertaking should be liable for damages if they failed to comply with the obligations to prevent and mitigate potential adverse impacts or to bring actual impacts to an end and minimise their extent , and as a result of this failure an adverse impact that should have been identified , prevented , mitigated , brought to an end or its extent minimised through the appropriate measures occurred and led to damage. the undertaking should also be liable for damages that result from adverse human rights , good governance , environmental or climate impacts that should have been identified , prevented , mitigated , brought to an end or their extent minimised by its subsidiaries.


### (57) as regards damages occurring at the level of established indirect business relationships , the liability of the company should be subject to specific conditions. the company should not be liable if it carried out specific due diligence measures. however , it should not be exonerated from liability through implementing such measures in case it was unreasonable to expect that the action actually taken , including as regards verifying compliance , would be adequate to prevent , mitigate , bring to an end or minimise the adverse impact. in addition , in the assessment of the existence and extent of liability , due account is to be taken of the company’s efforts , insofar as they relate directly to the damage in question , to comply with any remedial action required of them by a supervisory authority , any investments made and any targeted support provided as well as any collaboration with other entities to address adverse impacts in its value chains. ### (57) when the damage results from adverse impacts caused by business relationships within a company’s supply chain , the company should not be liable if it carried out specific due diligence measures. however , it should not be exonerated from liability through implementing such measures in case it was unreasonable to expect that the action actually taken , including as regards verifying compliance , would be adequate to prevent , mitigate , bring to an end or minimise the adverse impact. in addition , in the assessment of the existence and extent of liability , due account is to be taken of the company’s efforts , insofar as they relate directly to the damage in question , to comply with any remedial action required of them by a supervisory authority , any investments made and any targeted support provided as well as any collaboration with other entities to address adverse impacts in its value chains.


### (57) as regards damages occurring at the level of established indirect business relationships , the liability of the company should be subject to specific conditions. the company should not be liable if it carried out specific due diligence measures. however , it should not be exonerated from liability through implementing such measures in case it was unreasonable to expect that the action actually taken , including as regards verifying compliance , would be adequate to prevent , mitigate , bring to an end or minimise the adverse impact. in addition , in the assessment of the existence and extent of liability , due account is to be taken of the company’s efforts , insofar as they relate directly to the damage in question , to comply with any remedial action required of them by a supervisory authority , any investments made and any targeted support provided as well as any collaboration with other entities to address adverse impacts in its value chains. ### (57) when the damage results from adverse impacts caused by business relationships within a company’s value chain , the company should be liable unless it can prove that it took and implemented effective appropriate measures , in accordance with the directive , to ensure that the damage would not occur. in addition , in the assessment of the existence and extent of liability , due account is to be taken of the company’s efforts , insofar as they relate directly to the damage in question , to comply with any remedial action required of them by a supervisory authority , any investments made and any targeted support provided as well as any collaboration with other entities to address adverse impacts in its value chains.


### (57) as regards damages occurring at the level of established indirect business relationships , the liability of the company should be subject to specific conditions. the company should not be liable if it carried out specific due diligence measures. however , it should not be exonerated from liability through implementing such measures in case it was unreasonable to expect that the action actually taken , including as regards verifying compliance , would be adequate to prevent , mitigate , bring to an end or minimise the adverse impact. in addition , in the assessment of the existence and extent of liability , due account is to be taken of the company’s efforts , insofar as they relate directly to the damage in question , to comply with any remedial action required of them by a supervisory authority , any investments made and any targeted support provided as well as any collaboration with other entities to address adverse impacts in its value chains. ### (57) when the damage results from adverse impacts caused by business relationships within an undertaking’s value chain , the undertaking should be liable unless it can prove that it took and implemented effective appropriate measures , in accordance with the directive , to ensure that the damage would not occur . in addition , in the assessment of the existence and extent of liability , due account is to be taken of the undertaking’s efforts , insofar as they relate directly to the damage in question , to comply with any remedial action required of them by a supervisory authority , any investments made and any targeted support provided as well as any collaboration with other entities to address adverse impacts in its value chains.


### (57) as regards damages occurring at the level of established indirect business relationships , the liability of the company should be subject to specific conditions. the company should not be liable if it carried out specific due diligence measures. however , it should not be exonerated from liability through implementing such measures in case it was unreasonable to expect that the action actually taken , including as regards verifying compliance , would be adequate to prevent , mitigate , bring to an end or minimise the adverse impact. in addition , in the assessment of the existence and extent of liability , due account is to be taken of the company’s efforts , insofar as they relate directly to the damage in question , to comply with any remedial action required of them by a supervisory authority , any investments made and any targeted support provided as well as any collaboration with other entities to address adverse impacts in its value chains. ### (57) as regards damages occurring at the level of indirect business relationships , the liability of the company should be subject to specific conditions. the company should not be liable if it carried out specific due diligence measures. however , it should not be exonerated from liability through implementing such measures in case it was unreasonable to expect that the action actually taken , including as regards verifying compliance , would be adequate to prevent , mitigate , bring to an end or minimise the adverse impact. in addition , in the assessment of the existence and extent of liability , due account is to be taken of the company’s efforts , insofar as they relate directly to the damage in question , to comply with any remedial action required of them by a supervisory authority , any investments made and any targeted support provided as well as any collaboration with other entities to address adverse impacts in its value chains.


### (58) the liability regime does not regulate who should prove that the company’s action was reasonably adequate under the circumstances of the case , therefore this question is left to national law. ### deleted


### (63) in all member states’ national laws , directors owe a duty of care to the company. in order to ensure that this general duty is understood and applied in a manner which is coherent and consistent with the due diligence obligations introduced by this directive and that directors systematically take into account sustainability matters in their decisions , this directive should clarify , in a harmonised manner , the general duty of care of directors to act in the best interest of the company , by laying down that directors take into account the sustainability matters as referred to in directive 2013/34/eu , including , where applicable , human rights , climate change and environmental consequences , including in the short , medium and long term horizons. such clarification does not require changing existing national corporate structures. ### (63) in all member states’ national laws , directors owe a duty of care to the company. in order to ensure that this general duty is understood and applied in a manner which is coherent and consistent with the due diligence obligations introduced by this directive and that directors systematically take into account sustainability matters in their decisions , this directive should clarify , in a harmonised manner , the general duty of care of directors to act in the best interest of the company , by laying down that directors integrate the sustainability matters as referred to in directive 2013/34/eu , including , human rights , climate change and environmental consequences , including in the short , medium and long term horizons. such clarification does not require changing existing national corporate structures.


### (64) responsibility for due diligence should be assigned to the company’s directors , in line with the international due diligence frameworks. directors should therefore be responsible for putting in place and overseeing the due diligence actions as laid down in this directive and for adopting the company’s due diligence policy , taking into account the input of stakeholders and civil society organisations and integrating due diligence into corporate management systems. directors should also adapt the corporate strategy to actual and potential impacts identified and any due diligence measures taken. ### (64) responsibility for due diligence should be assigned to the undertaking's directors , in line with the international due diligence frameworks. directors should therefore be responsible for putting in place and overseeing the due diligence actions as laid down in this directive and for adopting the undertaking's due diligence policy , taking into account the input of stakeholders and civil society organisations and integrating due diligence into corporate management systems. directors should also adapt the corporate strategy to actual and potential impacts identified and any due diligence measures taken. since the term ‘director’ in this directive covers any member of the administrative , management or supervisory bodies , member states should ensure that , where applicable , the duty of care does not undermine the responsibilities of workers’ representatives on boards.


### (65) persons who work for companies subject to due diligence obligations under this directive or who are in contact with such companies in the context of their work-related activities can play a key role in exposing breaches of the rules of this directive. they can thus contribute to preventing and deterring such breaches and strengthening the enforcement of this directive. directive (eu) 2019/1937 of the european parliament and of the council106 should therefore apply to the reporting of all breaches of this directive and to the protection of persons reporting such breaches. ### (65) persons who work for companies subject to due diligence obligations under this directive or who are in contact with such companies in the context of their work-related activities can play a key role in exposing breaches of the rules of this directive. they can thus contribute to preventing and deterring such breaches and strengthening the enforcement of this directive. directive (eu) 2019/1937 of the european parliament and of the council106 should therefore apply to the reporting of all breaches of this directive and to the protection of persons reporting such breaches. in particular , stakeholders submitting complaints or concerns should be effectively protected , notably by ensuring the confidentiality and anonymity of the complaint or concern raised. stakeholders should also be protected against strategic lawsuits against public participation.


### (65) persons who work for companies subject to due diligence obligations under this directive or who are in contact with such companies in the context of their work-related activities can play a key role in exposing breaches of the rules of this directive. they can thus contribute to preventing and deterring such breaches and strengthening the enforcement of this directive. directive (eu) 2019/1937 of the european parliament and of the council106 should therefore apply to the reporting of all breaches of this directive and to the protection of persons reporting such breaches. ### (65) persons who work for companies subject to due diligence obligations under this directive or who are in contact with such companies in the context of their work-related activities can play a key role in exposing breaches of the rules of this directive. they can thus contribute to preventing and deterring such breaches and strengthening the enforcement of this directive. directive (eu) 2019/1937 of the european parliament and of the council106 should therefore apply to the reporting of all breaches of this directive and to the protection of persons reporting such breaches. in particular , stakeholders submitting complaints or concerns should be effectively protected , notably by ensuring the confidentiality and anonymity of the complaint or concern raised. stakeholders should also be protected against strategic lawsuit against public participation.


### (65) persons who work for companies subject to due diligence obligations under this directive or who are in contact with such companies in the context of their work-related activities can play a key role in exposing breaches of the rules of this directive. they can thus contribute to preventing and deterring such breaches and strengthening the enforcement of this directive. directive (eu) 2019/1937 of the european parliament and of the council106 should therefore apply to the reporting of all breaches of this directive and to the protection of persons reporting such breaches. ### (65) persons who work for undertakings subject to due diligence obligations under this directive or who are in contact with such undertakings in the context of their work-related activities can play a key role in exposing breaches of the rules of this directive. they can thus contribute to preventing and deterring such breaches and strengthening the enforcement of this directive. directive (eu) 2019/1937 of the european parliament and of the council106 should therefore apply to the reporting of all breaches of this directive and to the protection of persons reporting such breaches. in particular , stakeholders submitting complaints or concerns should be effectively protected , notably by ensuring the confidentiality and anonymity of the complaint or concern raised. stakeholders should also be protected against strategic lawsuits against public participation.


### (65) persons who work for companies subject to due diligence obligations under this directive or who are in contact with such companies in the context of their work-related activities can play a key role in exposing breaches of the rules of this directive. they can thus contribute to preventing and deterring such breaches and strengthening the enforcement of this directive. directive (eu) 2019/1937 of the european parliament and of the council106 should therefore apply to the reporting of all breaches of this directive and to the protection of persons reporting such breaches. ### (65) persons who work for companies subject to due diligence obligations under this directive or who are in contact with such companies in the context of their work-related activities can play a key role in exposing breaches of the rules of this directive. they can thus contribute to preventing and deterring such breaches and strengthening the enforcement of this directive. directive (eu) 2019/1937 of the european parliament and of the council106 should therefore apply to the reporting of all breaches of this directive and to the protection of persons reporting such breaches. in particular , stakeholders submitting complaints or concerns should be effectively protected , notably by ensuring the confidentiality and anonymity of the complaint or concern raised.


### (71) the objective of this directive , namely better exploiting the potential of the single market to contribute to the transition to a sustainable economy and contributing to sustainable development through the prevention and mitigation of potential or actual human rights and environmental adverse impacts in companies’ value chains , cannot be sufficiently achieved by the member states acting individually or in an uncoordinated manner , but can rather , by reason of the scale and effects of the actions , be better achieved at union level. in particular , addressed problems and their causes are of a transnational dimension , as many companies are operating union wide or globally and value chains expand to other member states and to third countries. moreover , individual member states’ measures risk being ineffective and lead to fragmentation of the internal market. therefore , the union may adopt measures , in accordance with the principle of subsidiarity as set out in article 5 teu. in accordance with the principle of proportionality , as set out in that article , this directive does not go beyond what is necessary in order to achieve that objective. ### (71) the objective of this directive , namely better exploiting the potential of the single market to contribute to the transition to a sustainable economy and contributing to sustainable development through the prevention and mitigation of potential or actual human rights , environmental and climate adverse impacts in companies’ value chains , cannot be sufficiently achieved by the member states acting individually or in an uncoordinated manner , but can rather , by reason of the scale and effects of the actions , be better achieved at union level. in particular , addressed problems and their causes are of a transnational dimension , as many companies are operating union wide or globally and value chains expand to other member states and to third countries. moreover , individual member states’ measures risk being ineffective and lead to fragmentation of the internal market. therefore , the union may adopt measures , in accordance with the principle of subsidiarity as set out in article 5 teu. in accordance with the principle of proportionality , as set out in that article , this directive does not go beyond what is necessary in order to achieve that objective.


### on obligations for companies regarding actual and potential human rights adverse impacts and environmental adverse impacts , with respect to their own operations , the operations of their subsidiaries , and the value chain operations carried out by entities with whom the company has an established business relationship and ### on obligations for companies regarding actual and potential human rights adverse impacts as well as environmental and climate adverse impacts , with respect to their own operations , products and services , the operations products and services of their subsidiaries , and the value chain operations carried out by entities with whom the company has a business relationship and


### on obligations for companies regarding actual and potential human rights adverse impacts and environmental adverse impacts , with respect to their own operations , the operations of their subsidiaries , and the value chain operations carried out by entities with whom the company has an established business relationship and ### on obligations for companies regarding actual and potential human rights adverse impacts as well as environmental and climate adverse impacts , with respect to their own operations , products and services , the operations , products and services of their subsidiaries , and the value chain operations carried out by entities with whom the company has a business relationship and


### on obligations for companies regarding actual and potential human rights adverse impacts and environmental adverse impacts , with respect to their own operations , the operations of their subsidiaries , and the value chain operations carried out by entities with whom the company has an established business relationship and ### on obligations for undertakings regarding actual and potential human rights , good governance , environmental and climate adverse impacts , with respect to their own operations , products and services , the operations , products and services of their subsidiaries , and the value chain operations carried out by entities with whom the undertaking has a business relationship and


### on obligations for companies regarding actual and potential human rights adverse impacts and environmental adverse impacts , with respect to their own operations , the operations of their subsidiaries , and the value chain operations carried out by entities with whom the company has an established business relationship and ### on obligations for companies regarding actual and potential human rights adverse impacts as well as environmental and climate adverse impacts , with respect to their own operations , products and services , as well as the operations , products and services of their subsidiaries and the value chain operations carried out by entities with whom the company has a business relationship and


### on obligations for companies regarding actual and potential human rights adverse impacts and environmental adverse impacts , with respect to their own operations , the operations of their subsidiaries , and the value chain operations carried out by entities with whom the company has an established business relationship and ### on obligations for companies regarding actual and potential human rights adverse impacts and environmental adverse impacts , with respect to their own operations , the operations of their subsidiaries , and the value chain operations carried out by entities with whom the company has a business relationship and


### on obligations for companies regarding actual and potential human rights adverse impacts and environmental adverse impacts , with respect to their own operations , the operations of their subsidiaries , and the value chain operations carried out by entities with whom the company has an established business relationship and ### on obligations for companies regarding actual and potential human rights adverse impacts , environmental and climate adverse impacts and rule of law and good governance adverse impacts , with respect to their own operations , products and services , the operations products and services of their subsidiaries , and the value chain operations carried out by entities with whom the company has a business relationship;


### on liability for violations of the obligations mentioned above. ### on liability for violations of the obligations mentioned above , and


### the nature of business relationships as ‘established’ shall be reassessed periodically , and at least every 12 months. ### deleted


### 1. this directive shall apply to companies which are formed in accordance with the legislation of a member state and which fulfil one of the following conditions: ### 1. this directive shall apply to companies which are formed in accordance with the legislation of a member state with the exception of micro-enterprises as defined by article 3(1) of directive 2013/34/eu.:


### 1. this directive shall apply to companies which are formed in accordance with the legislation of a member state and which fulfil one of the following conditions: ### 1. this directive shall apply to companies which are formed in accordance with the legislation of a member state and which fulfil one of the following conditions , with the exception of micro-enterprises as defined by article 3(1) of directive2013/34/eu:


### 1. this directive shall apply to companies which are formed in accordance with the legislation of a member state and which fulfil one of the following conditions: ### 1. this directive shall apply to companies which are formed in accordance with the legislation of a member state and which fulfil one of the following conditions , with the exception of micro-enterprises as defined by article 3(1) of directive 2013/34/eu:


### 1. this directive shall apply to companies which are formed in accordance with the legislation of a member state and which fulfil one of the following conditions: ### 1. this directive shall apply to companies which are formed in accordance with the legislation of a member state , with the exception of micro-enterprises as defined by article 3(1) of directive 2013/34/eu:


### 1. this directive shall apply to companies which are formed in accordance with the legislation of a member state and which fulfil one of the following conditions: ### 1. this directive shall apply to companies which are formed in accordance with the legislation of a member state , with the exception of micro-enterprises as defined by article 2(3) of the annex of the commission recommendation 2003/361.


### 1. this directive shall apply to companies which are formed in accordance with the legislation of a member state and which fulfil one of the following conditions: ### 1. this directive shall apply to companies and other legal persons (including with a non-profit purpose) undertaking activities of commercial nature , which are formed in accordance with the legislation of a member state and which fulfil one of the following conditions , with the exception of micro-enterprises as defined by article 3(1) of directive 2013/34/eu.


### the company had more than 500 employees on average and had a net worldwide turnover of more than eur 150 million in the last financial year for which annual financial statements have been prepared; ### deleted


### the company did not reach the thresholds under point (a) , but had more than 250 employees on average and had a net worldwide turnover of more than eur 40 million in the last financial year for which annual financial statements have been prepared , provided that at least 50% of this net turnover was generated in one or more of the following sectors: ### deleted


### (iii) the extraction of mineral resources regardless from where they are extracted (including crude petroleum , natural gas , coal , lignite , metals and metal ores , as well as all other , non-metallic minerals and quarry products) , the manufacture of basic metal products , other non-metallic mineral products and fabricated metal products (except machinery and equipment) , and the wholesale trade of mineral resources , basic and intermediate mineral products (including metals and metal ores , construction materials , fuels , chemicals and other intermediate products). ### deleted


### (iii) the extraction of mineral resources regardless from where they are extracted (including crude petroleum , natural gas , coal , lignite , metals and metal ores , as well as all other , non-metallic minerals and quarry products) , the manufacture of basic metal products , other non-metallic mineral products and fabricated metal products (except machinery and equipment) , and the wholesale trade of mineral resources , basic and intermediate mineral products (including metals and metal ores , construction materials , fuels , chemicals and other intermediate products). ### (iii) energy , the extraction , transport and handling of mineral resources regardless from where they are extracted (including crude petroleum , natural gas , coal , lignite , metals and metal ores , as well as all other , non-metallic minerals and quarry products) , the manufacture of basic metal products , other non-metallic mineral products and fabricated metal products (except machinery and equipment) , and the wholesale trade of mineral resources , basic and intermediate mineral products (including metals and metal ores , construction materials , fuels , chemicals and other intermediate products).


### 2. this directive shall also apply to companies which are formed in accordance with the legislation of a third country , and fulfil one of the following conditions: ### 2. this directive shall also apply to large as well as listed small and medium-sized companies which are formed in accordance with the legislation of a third country , operating in the union and have generated a net turnover of more than eur 8 million in the financial year preceding the last financial year


### 2. this directive shall also apply to companies which are formed in accordance with the legislation of a third country , and fulfil one of the following conditions: ### 2. this directive shall also apply to companies which are formed in accordance with the legislation of a third country and have generated a net turnover of more than eur 8 million in the financial year preceding the last financial year.


### 2. this directive shall also apply to companies which are formed in accordance with the legislation of a third country , and fulfil one of the following conditions: ### 2. this directive shall also apply to large as well as listed small and medium-sized companies which are formed in accordance with the legislation of a third country , and have generated a net turnover of more than eur 8 million in the financial year preceding the last financial year.


### 2. this directive shall also apply to companies which are formed in accordance with the legislation of a third country , and fulfil one of the following conditions: ### 2. this directive shall also apply to companies which are formed in accordance with the legislation of a third country , and have generated a net turnover of more than eur 8 million in the union in the financial year preceding the last financial year.


### generated a net turnover of more than eur 150 million in the union in the financial year preceding the last financial year; ### deleted


### generated a net turnover of more than eur 40 million but not more than eur 150 million in the union in the financial year preceding the last financial year , provided that at least 50% of its net worldwide turnover was generated in one or more of the sectors listed in paragraph 1 , point (b). ### deleted


### 3. for the purposes of paragraph 1 , the number of part-time employees shall be calculated on a full-time equivalent basis. temporary agency workers shall be included in the calculation of the number of employees in the same way as if they were workers employed directly for the same period of time by the company. ### 3. for the purposes of paragraph 1 , the number of part-time workers shall be calculated on a full-time equivalent basis. temporary agency workers and other workers in non-standard forms of employment , such as on-call work , multiparty employment relationships , disguised employment and dependent self-employed , shall be included in the calculation of the number of employees in the same way as if they were workers employed directly for the same period of time by the company.


### a legal person constituted as one of the legal forms listed in annex i to directive 2013/34/eu of the european parliament and of the council110 ; ### a legal person constituted as one of the legal forms listed in annex i and ii to directive 2013/34/eu of the european parliament and of the council110 ;


### ‘adverse environmental impact’ means an adverse impact on the environment resulting from the violation of one of the prohibitions and obligations pursuant to the international environmental conventions listed in the annex , part ii; ### ‘adverse environmental impact’ means


### ‘adverse environmental impact’ means an adverse impact on the environment resulting from the violation of one of the prohibitions and obligations pursuant to the international environmental conventions listed in the annex , part ii; ### ‘adverse environmental and climate impact’ means:


### ‘adverse environmental impact’ means an adverse impact on the environment resulting from the violation of one of the prohibitions and obligations pursuant to the international environmental conventions listed in the annex , part ii; ### ‘adverse environmental and climate impact’ means an adverse impact on the environment or climate resulting from any violation of one of the international and european environmental standards enshrined , including but not limited to , in the international environmental conventions and union legislation listed in the annex , part ii;


### ‘adverse environmental impact’ means an adverse impact on the environment resulting from the violation of one of the prohibitions and obligations pursuant to the international environmental conventions listed in the annex , part ii; ### ‘adverse environmental and climate impact’ means an adverse impact:


### ‘adverse human rights impact’ means an adverse impact on protected persons resulting from the violation of one of the rights or prohibitions listed in the annex , part i section 1 , as enshrined in the international conventions listed in the annex , part i section 2; ### ‘adverse human rights impact’ means an adverse impact on the enjoyment of rights , notably those listed in the annex , part i section 1 , as enshrined in the international conventions and european human rights instruments listed in the annex , part i section 2;


### ‘adverse human rights impact’ means an adverse impact on protected persons resulting from the violation of one of the rights or prohibitions listed in the annex , part i section 1 , as enshrined in the international conventions listed in the annex , part i section 2; ### ‘adverse human rights impact’ means any negative impact on the enjoyment of human rights , notably those listed in the annex , part i section 1 and the violation of the rights enshrined in the international conventions listed in the annex , part i section 2;


### ‘business relationship’ means a relationship with a contractor , subcontractor or any other legal entities (‘partner’) ### ‘business relationship’ means a relationship between the company or one of its subsidiaries and a contractor , subcontractor or any other legal entities , governmental or otherwise , within their value chain (‘partner’)


### ‘established business relationship’ means a business relationship , whether direct or indirect , which is , or which is expected to be lasting , in view of its intensity or duration and which does not represent a negligible or merely ancillary part of the value chain; ### deleted


### ‘value chain’ means activities related to the production of goods or the provision of services by a company , including the development of the product or the service and the use and disposal of the product as well as the related activities of upstream and downstream established business relationships of the company. as regards companies within the meaning of point (a)(iv) , ‘value chain’ with respect to the provision of these specific services shall only include the activities of the clients receiving such loan , credit , and other financial services and of other companies belonging to the same group whose activities are linked to the contract in question. the value chain of such regulated financial undertakings does not cover smes receiving loan , credit , financing , insurance or reinsurance of such entities; ### ‘value chain’ means activities related to the production of goods or the provision of services by a the company , its subsidiaries or companies in which it holds a minority shareholding , including the development of the product or the service and the use , waste management and disposal of the product as well as the related activities of upstream and downstream business relationships of the company or its subsidiaries.


### ‘value chain’ means activities related to the production of goods or the provision of services by a company , including the development of the product or the service and the use and disposal of the product as well as the related activities of upstream and downstream established business relationships of the company. as regards companies within the meaning of point (a)(iv) , ‘value chain’ with respect to the provision of these specific services shall only include the activities of the clients receiving such loan , credit , and other financial services and of other companies belonging to the same group whose activities are linked to the contract in question. the value chain of such regulated financial undertakings does not cover smes receiving loan , credit , financing , insurance or reinsurance of such entities; ### ‘value chain of a company' means activities related to the production of goods or the provision of services by the company , its subsidiaries or companies in which it holds a minority shareholding , including the development of the product or the service and the use , waste management and disposal of the product as well as the related activities of upstream and downstream business relationships of the company or its subsidiaries.


### ‘value chain’ means activities related to the production of goods or the provision of services by a company , including the development of the product or the service and the use and disposal of the product as well as the related activities of upstream and downstream established business relationships of the company. as regards companies within the meaning of point (a)(iv) , ‘value chain’ with respect to the provision of these specific services shall only include the activities of the clients receiving such loan , credit , and other financial services and of other companies belonging to the same group whose activities are linked to the contract in question. the value chain of such regulated financial undertakings does not cover smes receiving loan , credit , financing , insurance or reinsurance of such entities; ### ‘value chain’ means activities related to the production of goods or the provision of services by a company , its subsidiaries or companies in which it holds a minority shareholding , including the development of the product or the service and the use , waste management and disposal of the product as well as the related activities of upstream and downstream business relationships of the company or its subsidiaries.


### ‘value chain’ means activities related to the production of goods or the provision of services by a company , including the development of the product or the service and the use and disposal of the product as well as the related activities of upstream and downstream established business relationships of the company. as regards companies within the meaning of point (a)(iv) , ‘value chain’ with respect to the provision of these specific services shall only include the activities of the clients receiving such loan , credit , and other financial services and of other companies belonging to the same group whose activities are linked to the contract in question. the value chain of such regulated financial undertakings does not cover smes receiving loan , credit , financing , insurance or reinsurance of such entities; ### ‘value chain’ means activities related to the production of goods or the provision of services by the company , by its subsidiaries or by companies in which it holds minority shareholding , including the development of the product or the service and the use and disposal of the product as well as the related activities of upstream and downstream business relationships of the company or its subsidiaries. as regards companies within the meaning of point (a)(iv) , ‘value chain’ with respect to the provision of these specific services shall only include the activities of the clients receiving such loan , credit , and other financial services and of other companies belonging to the same group whose activities are linked to the contract in question;


### ‘independent third-party verification’ means verification of the compliance by a company , or parts of its value chain , with human rights and environmental requirements resulting from the provisions of this directive by an auditor which is independent from the company , free from any conflicts of interests , has experience and competence in environmental and human rights matters and is accountable for the quality and reliability of the audit; ### ‘independent third-party verification’ means verification of the compliance by a company , or parts of its value chain , with human rights , good governance , and environmental and climate requirements resulting from the provisions of this directive through an assessment of conformity in accordance with decision no 768/2008/ec of the european parliament and of the council and accredited in accordance with regulation (ec) no 765/2008 by an auditor which is independent from the company , free from any conflicts of interests , has experience , expertise and competence in environmental , climate human rights matters and good governance , is accredited in accordance with regulation (ec) no 765/2008 , has a european registered office and is accountable for the quality and reliability of the audit;


### ‘independent third-party verification’ means verification of the compliance by a company , or parts of its value chain , with human rights and environmental requirements resulting from the provisions of this directive by an auditor which is independent from the company , free from any conflicts of interests , has experience and competence in environmental and human rights matters and is accountable for the quality and reliability of the audit; ### ‘independent third-party verification’ means verification of the compliance by a company , or parts of its value chain , with human rights , environmental and climate requirements resulting from the provisions of this directive by an auditor which is independent from the company , free from any conflicts of interests , has experience , expertise and competence in environmental , climate and human rights matters and is accountable for the quality and reliability of the audit;


### ‘industry initiative’ means a combination of voluntary value chain due diligence procedures , tools and mechanisms , including independent third-party verifications , developed and overseen by governments , industry associations or groupings of interested organisations; ### ‘industry initiative’ means a combination of voluntary value chain due diligence procedures , tools and mechanisms , in accordance with decision no 768/2008/ec of the european parliament and of the council and accredited in accordance with regulation (ec) no 765/2008 , including independent third-party verifications , developed and overseen by governments , industry associations or groupings of interested organisations and overseen by an auditor with a european registered office accredited in accordance with regulation (ec) no 765/2008;


### ‘severe adverse impact’ means an adverse environmental impact or an adverse human rights impact that is especially significant by its nature , or affects a large number of persons or a large area of the environment , or which is irreversible , or is particularly difficult to remedy as a result of the measures necessary to restore the situation prevailing prior to the impact; ### ‘severe adverse impact’ means an adverse environmental and climate impact or an adverse human rights impact that is especially significant by its nature , or affects or could affect a large number of persons or a large area of the environment , or which is or could be irreversible , or is particularly difficult to remedy as a result of the measures necessary to restore the situation prevailing prior to the impact;


### ‘severe adverse impact’ means an adverse environmental impact or an adverse human rights impact that is especially significant by its nature , or affects a large number of persons or a large area of the environment , or which is irreversible , or is particularly difficult to remedy as a result of the measures necessary to restore the situation prevailing prior to the impact; ### ‘severe adverse impact’ means an adverse environmental and climate impact or an adverse human rights impact that is especially significant by its nature , or affects a large number of persons or a large area of the environment , or which is irreversible , or is particularly difficult to remedy as a result of the measures necessary to restore the situation prevailing prior to the impact;


### ‘stakeholders’ means the company’s employees , the employees of its subsidiaries , and other individuals , groups , communities or entities whose rights or interests are or could be affected by the products , services and operations of that company , its subsidiaries and its business relationships; ### ‘stakeholders’ means the company’s workers , the workers of its subsidiaries , its small shareholders and other individuals , groups , communities or entities or civil society organisations , whose rights or interests are or could be affected by potential or actual adverse human rights impacts and adverse environmental impacts arising from the products , services and operations or by the potential or actual adverse impacts on human rights , climate or environment of that company , its subsidiaries and its business relationships across the entire value chain;


### ‘stakeholders’ means the company’s employees , the employees of its subsidiaries , and other individuals , groups , communities or entities whose rights or interests are or could be affected by the products , services and operations of that company , its subsidiaries and its business relationships; ### n) ‘stakeholders’ means:


### ‘stakeholders’ means the company’s employees , the employees of its subsidiaries , and other individuals , groups , communities or entities whose rights or interests are or could be affected by the products , services and operations of that company , its subsidiaries and its business relationships; ### ‘stakeholders’ means


### ‘stakeholders’ means the company’s employees , the employees of its subsidiaries , and other individuals , groups , communities or entities whose rights or interests are or could be affected by the products , services and operations of that company , its subsidiaries and its business relationships; ### ‘stakeholders’ means:


### ‘appropriate measure’ means a measure that is capable of achieving the objectives of due diligence , commensurate with the degree of severity and the likelihood of the adverse impact , and reasonably available to the company , taking into account the circumstances of the specific case , including characteristics of the economic sector and of the specific business relationship and the company’s influence thereof , and the need to ensure prioritisation of action. ### ‘appropriate measures’ means a set of measures that is capable of achieving the objectives of due diligence and effectively addressing the adverse impact , commensurate with the degree of severity , and the likelihood of the adverse impact , taking into account the circumstances of the specific case ,.


### ‘appropriate measure’ means a measure that is capable of achieving the objectives of due diligence , commensurate with the degree of severity and the likelihood of the adverse impact , and reasonably available to the company , taking into account the circumstances of the specific case , including characteristics of the economic sector and of the specific business relationship and the company’s influence thereof , and the need to ensure prioritisation of action. ### ‘appropriate measure’ means a set of measures that is capable of achieving the objectives of due diligence and effectively addressing the adverse impact , , commensurate with the degree of severity and the likelihood of the adverse impact , taking into account the circumstances of the specific case.


### ‘appropriate measure’ means a measure that is capable of achieving the objectives of due diligence , commensurate with the degree of severity and the likelihood of the adverse impact , and reasonably available to the company , taking into account the circumstances of the specific case , including characteristics of the economic sector and of the specific business relationship and the company’s influence thereof , and the need to ensure prioritisation of action. ### ‘appropriate measure’ means a set of measures that is capable of achieving the objectives of due diligence and effectively addressing the adverse impact , commensurate with the degree of severity and the likelihood of the adverse impact , taking into account the circumstances of the specific case.


### ‘appropriate measure’ means a measure that is capable of achieving the objectives of due diligence , commensurate with the degree of severity and the likelihood of the adverse impact , and reasonably available to the company , taking into account the circumstances of the specific case , including characteristics of the economic sector and of the specific business relationship and the company’s influence thereof , and the need to ensure prioritisation of action. ### ‘appropriate measures’ means a set of measures that is capable of achieving the objectives of due diligence and effectively addressing the adverse impact , commensurate with the degree of severity and the likelihood of the adverse impact , taking into account the circumstances of the specific case.


### 1. member states shall ensure that companies conduct human rights and environmental due diligence as laid down in articles 5 to 11 (‘due diligence’) by carrying out the following actions: ### 1. member states shall ensure that companies respect human rights , the environment and climate by obliging them to conduct human rights environmental and climate due diligence as laid down in articles 5 to 11 (‘due diligence’) by carrying out the following actions:


### 1. member states shall ensure that companies conduct human rights and environmental due diligence as laid down in articles 5 to 11 (‘due diligence’) by carrying out the following actions: ### 1. member states shall ensure that companies shall respect human rights , the environment and climate by obliging them to conduct human rights , environmental and climate due diligence as laid down in articles 5 to 11 (‘due diligence’) by carrying out the following actions:


### 1. member states shall ensure that companies conduct human rights and environmental due diligence as laid down in articles 5 to 11 (‘due diligence’) by carrying out the following actions: ### 1. member states shall ensure that companies respect human rights , the environment and the climate by obliging them to conduct human rights , environmental and climate due diligence as laid down in articles 5 to 11 (‘due diligence’) by carrying out the following actions:


### 1. member states shall ensure that companies conduct human rights and environmental due diligence as laid down in articles 5 to 11 (‘due diligence’) by carrying out the following actions: ### 1. member states shall ensure that companies respect human rights , the environment and climate by obliging them to conduct human rights , environmental and climate due diligence as laid down in articles 5 to 11 (‘due diligence’) by carrying out the following actions:


### 1. member states shall ensure that companies integrate due diligence into all their corporate policies and have in place a due diligence policy. the due diligence policy shall contain all of the following: ### 1. member states shall ensure that companies integrate due diligence into all their corporate policies and have in place a due diligence policy. the due diligence policy shall be developed in consultation with all stakeholders and shall contain all of the following:


### 1. member states shall ensure that companies integrate due diligence into all their corporate policies and have in place a due diligence policy. the due diligence policy shall contain all of the following: ### 1. member states shall ensure that companies integrate due diligence into all their corporate policies and have in place a due diligence policy. the due diligence policy shall be developed in consultation with all stakeholder sand shall contain all of the following:


### 1. member states shall ensure that companies integrate due diligence into all their corporate policies and have in place a due diligence policy. the due diligence policy shall contain all of the following: ### 1. member states shall ensure that companies integrate due diligence into all their corporate policies and have in place a due diligence policy. the due diligence policy shall be developed in consultation with stakeholders and contain all of the following:


### a description of the company’s approach , including in the long term , to due diligence; ### a description of the company’s approach to due diligence , including in the short , medium and long term , to due diligence and covering all their operations , products and services;


### a description of the company’s approach , including in the long term , to due diligence; ### a description of the company’s approach to due diligence , including in the short , medium and long term , and covering all their operations , products and services;


### a code of conduct describing rules and principles to be followed by the company’s employees and subsidiaries; ### a code of conduct describing rules and principles to be followed by the company’s workers and subsidiaries across all corporate functions and operations;


### a code of conduct describing rules and principles to be followed by the company’s employees and subsidiaries; ### a code of conduct describing rules and principles to be followed by the company’s employees and subsidiaries and entities with whom the company or any of its subsidiaries have business relationships;


### a code of conduct describing rules and principles to be followed by the company’s employees and subsidiaries; ### a code of conduct describing rules and principles to be followed by the company’s workers and subsidiaries across all corporate functions and operations ,


### a code of conduct describing rules and principles to be followed by the company’s employees and subsidiaries; ### a code of conduct describing rules and principles to be followed by the company’s employees and subsidiaries across all corporate functions and operations;


### a description of the processes put in place to implement due diligence , including the measures taken to verify compliance with the code of conduct and to extend its application to established business relationships. ### a description of the processes and concrete measures put in place to implement due diligence across the value chain , including the measures taken to verify compliance with the code of conduct and to extend its application to business relationships.


### a description of the processes put in place to implement due diligence , including the measures taken to verify compliance with the code of conduct and to extend its application to established business relationships. ### a description of the processes put in place to implement due diligence , including the measures taken to verify compliance with the code of conduct and to extend its application to business relationships.


### 2. member states shall ensure that the companies update their due diligence policy annually. ### 2. member states shall ensure that the companies review , update and publish their due diligence policy annually at least every 12 months and whenever needed , in particular when there are reasonable grounds to believe that new risks of the occurrence of adverse impacts have arisen or may arise.


### 2. member states shall ensure that the companies update their due diligence policy annually. ### 2. member states shall ensure that the companies review , update and publish their due diligence policy at least every 12 months and whenever needed , in particular when there are reasonable grounds to believe that new risks of the occurrence of adverse impacts have arised or may arise.


### identifying actual and potential adverse impacts ### identifying and assessing actual and potential adverse impacts


### 1. member states shall ensure that companies take appropriate measures to identify actual and potential adverse human rights impacts and adverse environmental impacts arising from their own operations or those of their subsidiaries and , where related to their value chains , from their established business relationships , in accordance with paragraph 2 , 3 and 4. ### 1. member states shall ensure that companies take appropriate measures to identify and assess , actual and potential adverse human rights impacts and adverse environmental impacts arising from their own operations , products and services , or those of their subsidiaries and , those related to their value chains. these measures shall also include the assessment of the impact of policies and strategies regarding business relationships , including trading , procurement and pricing practices.


### 1. member states shall ensure that companies take appropriate measures to identify actual and potential adverse human rights impacts and adverse environmental impacts arising from their own operations or those of their subsidiaries and , where related to their value chains , from their established business relationships , in accordance with paragraph 2 , 3 and 4. ### 1. member states shall ensure that companies take appropriate measures to identify and assess actual and potential adverse human rights as well as environmental and climate adverse impacts arising from their own operations , products and services or those of their subsidiaries and those related to their value chains. these measures shall also include the assessment of the impact of policies and strategies regarding business relationships , including trading , procurement and pricing practices.


### 1. member states shall ensure that companies take appropriate measures to identify actual and potential adverse human rights impacts and adverse environmental impacts arising from their own operations or those of their subsidiaries and , where related to their value chains , from their established business relationships , in accordance with paragraph 2 , 3 and 4. ### 1. member states shall ensure that companies take appropriate measures to identify actual and potential adverse human rights impacts and actual and potential adverse environmental impacts arising from their own operations or those of their subsidiaries and , where related to their value chains , from their established business relationships , in accordance with paragraph 2 , 3 and 4.


### 1. member states shall ensure that companies take appropriate measures to identify actual and potential adverse human rights impacts and adverse environmental impacts arising from their own operations or those of their subsidiaries and , where related to their value chains , from their established business relationships , in accordance with paragraph 2 , 3 and 4. ### 1. member states shall ensure that companies take appropriate measures to identify actual and potential adverse human rights impacts and adverse environmental impacts arising from their own operations or those of their subsidiaries and , where related to their value chains , from their business relationships , in accordance with paragraph 2 , 3 and 4.


### 1. member states shall ensure that companies take appropriate measures to identify actual and potential adverse human rights impacts and adverse environmental impacts arising from their own operations or those of their subsidiaries and , where related to their value chains , from their established business relationships , in accordance with paragraph 2 , 3 and 4. ### 1. member states shall ensure that companies take appropriate measures to identify and assess actual and potential adverse human rights as well as environmental and climate adverse impacts arising from their own operations , products and services , or those of their subsidiaries and those related to their value chains. these measures shall also include the assessment of the impact of policies and strategies regarding business relationships , including trading , procurement and pricing practices.


### 2. by way of derogation from paragraph 1 , companies referred to in article 2(1) , point (b) , and article 2(2) , point (b) , shall only be required to identify actual and potential severe adverse impacts relevant to the respective sector mentioned in article 2(1) , point (b). ### deleted


### 2. by way of derogation from paragraph 1 , companies referred to in article 2(1) , point (b) , and article 2(2) , point (b) , shall only be required to identify actual and potential severe adverse impacts relevant to the respective sector mentioned in article 2(1) , point (b). ### 2. member states shall ensure that companies map their value chain and publicly disclose information relevant to human rights , environmental and climate impacts , including names , locations , types of operations , products and services supplied , as well as other relevant information concerning subsidiaries , branches and business relationships.


### 3. when companies referred to in article 3 , point (a)(iv) , provide credit , loan or other financial services , identification of actual and potential adverse human rights impacts and adverse environmental impacts shall be carried out only before providing that service.. ### deleted


### 4. member states shall ensure that , for the purposes of identifying the adverse impacts referred to in paragraph 1 based on , where appropriate , quantitative and qualitative information , companies are entitled to make use of appropriate resources , including independent reports and information gathered through the complaints procedure provided for in article 9. companies shall , where relevant , also carry out consultations with potentially affected groups including workers and other relevant stakeholders to gather information on actual or potential adverse impacts. ### 4. member states shall ensure that , for the purposes of identifying the adverse impacts referred to in paragraph 1 based on quantitative and qualitative information , companies are entitled to make use of appropriate resources , including independent reports and information gathered through the complaints procedure provided for in article 9. companies shall also carry out consultations with potentially affected groups including workers and other relevant stakeholders to gather information on actual or potential adverse impacts.


### 4. member states shall ensure that , for the purposes of identifying the adverse impacts referred to in paragraph 1 based on , where appropriate , quantitative and qualitative information , companies are entitled to make use of appropriate resources , including independent reports and information gathered through the complaints procedure provided for in article 9. companies shall , where relevant , also carry out consultations with potentially affected groups including workers and other relevant stakeholders to gather information on actual or potential adverse impacts. ### 4. member states shall ensure that , for the purposes of identifying and assessing the adverse impacts referred to in paragraph 1 based on quantitative and qualitative information , including disaggregated data , companies are entitled to make use of appropriate resources , including independent reports and information gathered through the complaints procedure provided for in article 9. companies shall collect and assess sex-disaggregated data and identify gender-specific trends and patterns to understand whether their activities impact differently on men and women. companies shall also carry out consultations with potentially affected groups including workers and other relevant stakeholders , including trade unions , civil society organisations as well as human rights and environmental rights defenders , to gather information on as well as identify and assess actual or potential adverse impacts.


### 4. member states shall ensure that , for the purposes of identifying the adverse impacts referred to in paragraph 1 based on , where appropriate , quantitative and qualitative information , companies are entitled to make use of appropriate resources , including independent reports and information gathered through the complaints procedure provided for in article 9. companies shall , where relevant , also carry out consultations with potentially affected groups including workers and other relevant stakeholders to gather information on actual or potential adverse impacts. ### 4. member states shall ensure that , for the purposes of identifying and assessing the adverse impacts referred to in paragraph 1 based on , quantitative and qualitative information , including disaggregated data , companies are entitled to make use of appropriate resources , including independent and science-based reports and information gathered through the complaints procedure provided for in article 9. companies shall also carry out consultations with potentially affected groups including workers and other relevant stakeholders including trade unions and non-governmental organisations to gather information on as well as to identify and assess actual or potential adverse impacts.


### 4. member states shall ensure that , for the purposes of identifying the adverse impacts referred to in paragraph 1 based on , where appropriate , quantitative and qualitative information , companies are entitled to make use of appropriate resources , including independent reports and information gathered through the complaints procedure provided for in article 9. companies shall , where relevant , also carry out consultations with potentially affected groups including workers and other relevant stakeholders to gather information on actual or potential adverse impacts. ### 4. member states shall ensure that , for the purposes of identifying the actual and potential adverse impacts referred to in paragraph 1 based on , where appropriate , quantitative and qualitative information , companies are entitled to make use of appropriate resources , including independent reports and information gathered through the complaints procedure provided for in article 9. companies shall , where relevant , also carry out consultations with potentially affected groups including workers and other relevant stakeholders to gather information on actual or potential adverse impacts.


### 4. member states shall ensure that , for the purposes of identifying the adverse impacts referred to in paragraph 1 based on , where appropriate , quantitative and qualitative information , companies are entitled to make use of appropriate resources , including independent reports and information gathered through the complaints procedure provided for in article 9. companies shall , where relevant , also carry out consultations with potentially affected groups including workers and other relevant stakeholders to gather information on actual or potential adverse impacts. ### 4. member states shall ensure that , for the purposes of identifying and assessing the adverse impacts referred to in paragraph 1 based on quantitative and qualitative information , including disaggregated data , companies are entitled to make use of appropriate resources , including independent reports and information gathered through the complaints procedure provided for in article 9. companies shall also carry out consultations with potentially affected groups including workers and other relevant stakeholders , including trade unions , civil society organisations and human rights and environmental rights defenders , to gather information on , as well as to identify and assess actual or potential adverse impacts.


### 4. member states shall ensure that , for the purposes of identifying the adverse impacts referred to in paragraph 1 based on , where appropriate , quantitative and qualitative information , companies are entitled to make use of appropriate resources , including independent reports and information gathered through the complaints procedure provided for in article 9. companies shall , where relevant , also carry out consultations with potentially affected groups including workers and other relevant stakeholders to gather information on actual or potential adverse impacts. ### 4. member states shall ensure that , for the purposes of identifying the adverse impacts referred to in paragraph 1 based on , where appropriate , quantitative and qualitative information , companies are entitled to make use of appropriate resources , including independent reports and information gathered through the complaints procedure provided for in article 9. companies shall also carry out meaningful , gender inclusive engagement with potentially affected stakeholders and their representative organisations , especially vulnerable stakeholders , such as workers , trade unions , smallholders , indigenous peoples and local communities , to gather information on as well as to identify and assess actual or potential adverse impacts.


### 1. member states shall ensure that companies take appropriate measures to prevent , or where prevention is not possible or not immediately possible , adequately mitigate potential adverse human rights impacts and adverse environmental impacts that have been , or should have been , identified pursuant to article 6 , in accordance with paragraphs 2 , 3 , 4 and 5 of this article. ### 1. member states shall ensure that companies take appropriate measures to prevent , or where prevention is not possible or not immediately possible , adequately mitigate potential adverse human rights impacts and adverse environmental and adverse impacts that have been , or should have been , identified pursuant to article 6.


### 1. member states shall ensure that companies take appropriate measures to prevent , or where prevention is not possible or not immediately possible , adequately mitigate potential adverse human rights impacts and adverse environmental impacts that have been , or should have been , identified pursuant to article 6 , in accordance with paragraphs 2 , 3 , 4 and 5 of this article. ### 1. member states shall ensure that companies take appropriate measures to prevent , or where prevention is not possible or not immediately possible , adequately mitigate potential adverse human rights as well as environmental and climate adverse impacts that have been , or should have been , identified pursuant to article 6.


### 1. member states shall ensure that companies take appropriate measures to prevent , or where prevention is not possible or not immediately possible , adequately mitigate potential adverse human rights impacts and adverse environmental impacts that have been , or should have been , identified pursuant to article 6 , in accordance with paragraphs 2 , 3 , 4 and 5 of this article. ### 1. member states shall ensure that companies take appropriate measures to prevent , or where prevention is not possible or not immediately possible , adequately mitigate potential adverse human rights impacts and adverse environmental impacts that have been , or should have been , identified pursuant to article 6 , in accordance with paragraphs 2 , 3 , 4 and 5 of this article. member states shall ensure that companies operating in a sector referred in article 3 (ea) take all the necessary measures to target the specific risks arising from their specific sector.


### 2. companies shall be required to take the following actions , where relevant: ### 2. companies shall be required to take appropriate measures , including but not limited to the following actions:


### 2. companies shall be required to take the following actions , where relevant: ### 2. companies shall be required to take appropriate measures , including but not limited to:


### where necessary due to the nature or complexity of the measures required for prevention , develop and implement a prevention action plan , with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. the prevention action plan shall be developed in consultation with affected stakeholders; ### develop and implement a prevention action plan , with reasonable and clearly defined timelines for appropriate measures and qualitative and quantitative indicators for measuring improvement. the prevention action plan shall be developed in consultation with all stakeholders;


### where necessary due to the nature or complexity of the measures required for prevention , develop and implement a prevention action plan , with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. the prevention action plan shall be developed in consultation with affected stakeholders; ### develop and implement a prevention action plan , with reasonable and clearly defined timelines for appropriate measures and qualitative and quantitative indicators for measuring improvement. the prevention action plan shall be developed in consultation with stakeholders;


### where necessary due to the nature or complexity of the measures required for prevention , develop and implement a prevention action plan , with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. the prevention action plan shall be developed in consultation with affected stakeholders; ### develop and implement a prevention action plan , with reasonable and clearly defined timelines for appropriate measures and qualitative and quantitative indicators for measuring improvement. the prevention action plan shall be developed in consultation with affected stakeholders;


### where necessary due to the nature or complexity of the measures required for prevention , develop and implement a prevention action plan , with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. the prevention action plan shall be developed in consultation with affected stakeholders; ### develop and implement a prevention action plan , with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. the prevention action plan shall be developed in accordance with article 4(2) point (a) on meaningful stakeholder engagement. when necessary , this plan should also include a prioritisation strategy on the basis of severity and irremediability of actual or potential harm;


### seek contractual assurances from a business partner with whom it has a direct business relationship that it will ensure compliance with the company’s code of conduct and , as necessary , a prevention action plan , including by seeking corresponding contractual assurances from its partners , to the extent that their activities are part of the company’s value chain (contractual cascading). when such contractual assurances are obtained , paragraph 4 shall apply; ### ensure contractual and other assurances regarding its business relationships of compliance with the company’s code of conduct and prevention action plan , including by seeking corresponding contractual assurances from its partners , to the extent that their activities are part of the company’s value chain (contractual cascading). in case the business partner belongs to one of the sectors referred to in article 3 (ea) , the assurances shall include details on ensuring compliance with regards to the risks that are specific to that sector;


### seek contractual assurances from a business partner with whom it has a direct business relationship that it will ensure compliance with the company’s code of conduct and , as necessary , a prevention action plan , including by seeking corresponding contractual assurances from its partners , to the extent that their activities are part of the company’s value chain (contractual cascading). when such contractual assurances are obtained , paragraph 4 shall apply; ### obtain contractual and other assurances regarding its business partner with whom it has a direct business relationship that it will ensure compliance with the company’s code of conduct and , as necessary , a prevention action in case the business relationship is active in one of the sectors referred to in article 3 , the assurances shall also include details on ensuring compliance with regards to the risks that are specific to that sector. with regards to contractual assurances the terms shall be reasonable and non-discriminatory. obtaining contractual assurances shall not exempt a company from its further obligations under this directive nor shall it as such exempt a company from its liability for adverse impacts; ,


### seek contractual assurances from a business partner with whom it has a direct business relationship that it will ensure compliance with the company’s code of conduct and , as necessary , a prevention action plan , including by seeking corresponding contractual assurances from its partners , to the extent that their activities are part of the company’s value chain (contractual cascading). when such contractual assurances are obtained , paragraph 4 shall apply; ### obtain contractual and other assurances from business partners on compliance with the company’s code of conduct and a prevention action plan. with regards to contractual assurances , the terms shall be reasonable and non-discriminatory. in case the business relationship is active in one of the sectors referred to in article 3 point (ca) , the assurances shall also include details on ensuring compliance with regards to the risks that are specific to that sector;


### seek contractual assurances from a business partner with whom it has a direct business relationship that it will ensure compliance with the company’s code of conduct and , as necessary , a prevention action plan , including by seeking corresponding contractual assurances from its partners , to the extent that their activities are part of the company’s value chain (contractual cascading). when such contractual assurances are obtained , paragraph 4 shall apply; ### seek contractual assurances from a business partner with whom it has a direct business relationship that it will ensure compliance with the company’s code of conduct and , as necessary , a prevention action plan , including by seeking corresponding contractual assurances from its partners , to the extent that their activities are part of the company’s value chain (contractual cascading). when such contractual assurances are obtained , paragraph 4 shall apply. in case the business partner belongs to one of the sectors referred to in article 3 , point (ea) , the assurances shall include details on ensuring compliance with regards to the risks that are specific to that sector;


### make necessary investments , such as into management or production processes and infrastructures , to comply with paragraph 1; ### make necessary investments , such as into management or production processes , capacity building , joint prevention and mitigation measures with value chain partners , pricing mechanisms that contribute to living wages and incomes for their suppliers and infrastructures , to comply with paragraph 1;


### provide targeted and proportionate support for an sme with which the company has an established business relationship , where compliance with the code of conduct or the prevention action plan would jeopardise the viability of the sme; ### provide the necessary support such as loans or financing for business partners , in particular smes where compliance with the code of conduct or the prevention action plan would jeopardise the viability of the business partner;


### provide targeted and proportionate support for an sme with which the company has an established business relationship , where compliance with the code of conduct or the prevention action plan would jeopardise the viability of the sme; ### provide targeted and proportionate support for an sme with which the company has a business relationship , where compliance with the code of conduct or the prevention action plan would jeopardise the viability of the sme;


### in compliance with union law including competition law , collaborate with other entities , including , where relevant , to increase the company’s ability to bring the adverse impact to an end , in particular where no other action is suitable or effective. ### in compliance with union law including competition law , collaborate with other entities , including , where applicable , to increase the company’s ability to bring the adverse impact to an end , in particular where no other action is suitable or effective.


### 3. as regards potential adverse impacts that could not be prevented or adequately mitigated by the measures in paragraph 2 , the company may seek to conclude a contract with a partner with whom it has an indirect relationship , with a view to achieving compliance with the company’s code of conduct or a prevention action plan. when such a contract is concluded , paragraph 4 shall apply. ### deleted


### the contractual assurances or the contract shall be accompanied by the appropriate measures to verify compliance. for the purposes of verifying compliance , the company may refer to suitable industry initiatives or independent third-party verification. ### the contractual assurances or the contract shall be accompanied by the appropriate measures to verify compliance.


### when contractual assurances are obtained from , or a contract is entered into , with an sme , the terms used shall be fair , reasonable and non-discriminatory. where measures to verify compliance are carried out in relation to smes , the company shall bear the cost of the independent third-party verification. ### when contractual assurances are obtained from , or a contract is entered into , with an sme , the terms used shall be reasonable and non-discriminatory. where measures to verify compliance are carried out in relation to smes , the company shall bear the related cost of the independent third-party verification.


### as regards potential adverse impacts within the meaning of paragraph 1 that could not be prevented or adequately mitigated by the measures in paragraphs 2 , 3 and 4 , the company shall be required to refrain from entering into new or extending existing relations with the partner in connection with or in the value chain of which the impact has arisen and shall , where the law governing their relations so entitles them to , take the following actions: ### as regards potential adverse impacts within the meaning of paragraph 1 that could not be prevented or adequately mitigated by the measures in paragraphs 2 , 3 and 4 , because mitigation is not possible or acceptable , or there is no reasonable prospect of change , the company shall be required to refrain from entering into new or extending existing relations with the partner in connection with or in the value chain of which the impact has arisen and in such cases , the company shall , in consultation with stakeholders , identify and remedy the risks and impacts of their actions.


### as regards potential adverse impacts within the meaning of paragraph 1 that could not be prevented or adequately mitigated by the measures in paragraphs 2 , 3 and 4 , the company shall be required to refrain from entering into new or extending existing relations with the partner in connection with or in the value chain of which the impact has arisen and shall , where the law governing their relations so entitles them to , take the following actions: ### as regards potential adverse impacts within the meaning of paragraph 1 that could not be prevented or adequately mitigated by the measures in paragraphs 2 , 3 and 4 , because mitigation is not possible or acceptable , or there is no reasonable prospect of change , the company shall be required to refrain from entering into new or extending existing relations with the partner in connection with or in the value chain of which the impact has arisen. in such cases , the company shall , in consultation with stakeholders , identify and remedy the risks and impacts of their actions , and:


### temporarily suspend commercial relations with the partner in question , while pursuing prevention and minimisation efforts , if there is reasonable expectation that these efforts will succeed in the short-term; ### temporarily suspend commercial relations with the partner in question , while pursuing prevention and mitigation efforts , if there is reasonable expectation that these efforts will succeed in the short-term;


### terminate the business relationship with respect to the activities concerned if the potential adverse impact is severe. ### terminate the business relationship with respect to the activities concerned if the potential adverse impact is severe as well as if the conditions for temporary suspension under point (a) are not met.


### member states shall provide for the availability of an option to terminate the business relationship in contracts governed by their laws. ### member states shall provide for the availability of an option to suspend or terminate the business relationship in contracts governed by their laws.


### 6. by way of derogation from paragraph 5 , point (b) , when companies referred to in article 3 , point (a)(iv) , provide credit , loan or other financial services , they shall not be required to terminate the credit , loan or other financial service contract when this can be reasonably expected to cause substantial prejudice to the entity to whom that service is being provided. ### deleted


### 2. where the adverse impact cannot be brought to an end , member states shall ensure that companies minimise the extent of such an impact. ### 2. where the adverse impact cannot immediately be brought to an end , member states shall ensure that companies minimise the extent of such an impact , while continuing to pursue all efforts to bring the adverse impact to an end.


### 3. companies shall be required to take the following actions , where relevant: ### 3. in order to comply with paragraphs 1 and 2 of this article , companies shall be required to take appropriate measures , including but not limited to the following actions:


### 3. companies shall be required to take the following actions , where relevant: ### 3. companies shall be required to take the following actions , including but not limited to:


### 3. companies shall be required to take the following actions , where relevant: ### 3. in order to comply with paragraphs 1 and 2 of this article , companies shall be required to take the following actions:


### neutralise the adverse impact or minimise its extent , including by the payment of damages to the affected persons and of financial compensation to the affected communities. the action shall be proportionate to the significance and scale of the adverse impact and to the contribution of the company’s conduct to the adverse impact; ### neutralise the adverse impact through appropriate measures. in the event that these measures are accompanied by financial compensation paid by companies for adverse impacts resulting from business relationships , companies shall benefit from legal assurance to obtain compensation from the partners concerned;


### neutralise the adverse impact or minimise its extent , including by the payment of damages to the affected persons and of financial compensation to the affected communities. the action shall be proportionate to the significance and scale of the adverse impact and to the contribution of the company’s conduct to the adverse impact; ### neutralise the adverse impact through appropriate measures , including gender and culturally responsive policies and plans. in the event that these measures are accompanied by financial compensation paid by companies for adverse impacts resulting from business relationships , companies shall benefit from legal assurance to obtain compensation from the partners concerned;