Contestation and Compromise in Shaping the European Union's Corporate Sustainability due Diligence Directive: Implications for Global Value Chain Governance

ABSTRACT This paper explores the European Union's Corporate Sustainability Due Diligence Directive (CS3D) in the context of ongoing debates on private and public governance of global value chains (GVCs). Conceptually, it draws on neo‐Gramscian perspectives to analyze how contestation and compromise between distinct stakeholders and dynamics of hegemony and counter‐hegemony shaped the CS3D. It draws on secondary lobbying databases and primary interviews with key actors from civil society, trade unions, industry and European Union institutions to explore two key research questions: First, what were the main key issues of contestation between key actors in the understanding of GVCs within the CS3D? Second, how was the role of existing private governance initiatives in CS3D conceptualized by key actors? We illustrate how contestation shaped compromise on the conceptualization of GVCs and the role of private governance in CS3D. Our findings highlight how this new regime could impact the future of due diligence and GVC governance.