Author
Prof Federico Pistelli
Organisation/Institution
University of Trento
Country
ITALY
Panel
Corporate Law and Governance
Title
Sustainability in global supply chains. Regional fragmentation and Global justice.
Abstract
Sustainability in global supply chains requires harmonized process and product standards. The current regional fragmentation poses governance challenges when the enterprises within the chain are located in different jurisdictions but are involved in the same production and distribution processes. The paper examines the private and administrative regulatory instruments that can mitigate the fragmentation of sustainability standards. This paper’s proposal investigates the potential impact of the European Corporate Sustainability Due Diligence Directive (2024/1760) (CS3D) from a comparative and transnational perspective, focusing on North–South and South–South production networks, with particular regard to Asia’s role as a key manufacturing and sourcing hub. By comparing the Directive’s approach with similar initiatives at global level, the paper argues that its extraterritorial reach may ground some core principles for a common approach to environmental and social governance of global value chains. The entry into force of the CS3D marks a significant evolution in the EU’s regulatory approach towards global value chains. By shifting from voluntary commitments to mandatory human rights and environmental due diligence obligations, the Directive operationalises a notion of corporate social responsibility based on the international soft law model, in particular the United Nations Guiding Principles on Business and Human Rights. The shift from voluntary to mandatory due diligence in some regions (EU) increases the level of protection but also enhances the degree of differentiation, From a perspective of social justice, the CS3D embodies a value-oriented paradigm aimed at embedding principles of solidarity and shared responsibility within supply chain governance. It thus aspires to correct distributive asymmetries and to strengthen the position of local communities and workers adversely affected by production-related externalities. The CS3D’s emphasis on stakeholder engagement and remediation duties further contributes to the emergence of a transnational paradigm of corporate accountability. To this end, the CS3D raises new questions on regulatory convergence on global level. Given the heterogeneity of national frameworks on due diligence and sustainability across jurisdictions, the paper investigates whether the EU’s model can contribute to build a global normative benchmark, fostering a race to the top in sustainable business regulation, or whether it will instead produce a fragmented mosaic of overlapping and potentially competing standards.
Biography
Federico Pistelli is Assistant Professor in Private Law at the Faculty of Law of the University ofTrento. He is involved in several research projects dealing with sustainable transition and corporate governance. He is co-editor of the book “Sustainable Development and Supply Chain Governance” (eds. Elgar, 2025), which explores the impact of the shift from voluntary to mandatory due diligence and the sustainability challenges on global value chains, in light of the most recent EU legislative initiatives in the field and the innovative case law in Europe and North America. Fabrizio Cafaggi is a member of the Italian Council ofState, co-founder of the European Law Institute and member of the American Law Institute. He is the co-coordinator of a Unidroit working group on collaborative contracts in agrifood supply chains. His recent studies deal with contracting in global chains, transnational private regulation and network contracts.
