Mandatory Corporate Sustainability Due Diligence and its Limitations : The persistence of unequal exchange

Global value chains are the main contemporary sites where workers’ exploitation and environmental degradation occur. In 2024, the EU approved the Corporate Sustainability Due Diligence directive (CSDDD), which aims to make large companies perform due diligence in their value chains to prevent violations of human, environmental and labour rights. Notably, this law does not apply only to EU companies, but to all large transnational companies operating in the EU. In this chapter we analyse the CSDDD from a world-system perspective, assessing whether it might address the unequal exchange between core and peripheral countries. As the CSDDD aims to enhance the respect of human rights, labour rights and to fight climate change, it would jeopardize two of the pillars of unequal exchange, «cheap labor» and «cheap nature». However, we show that the law suffers from structural limitations, which will make it unlikely that this will happen. In turn, these limitations are linked to entrenched capital interest, which has limited the reach of regulation.