The European Parliament’s Economic and Monetary Affairs Committee (ECON) has adopted its position on the Corporate Sustainability Due Diligence Directive (CSDDD). The committee has agreed to further clarify and enhance the obligations for the financial sector for conducting human rights and environmental due diligence. The adoption of the directive will mean all large companies must set climate transition plans, enabling the meeting of EU climate neutrality targets. It also means that financial institutions (FIs) must perform human rights and environmental due diligence through the value chain. Large financial market participants are already required to perform due diligence, but this is currently limited to asset management firms only. While the news was widely welcomed by stakeholders, the European Sustainable Investment Forum (Eurosif) was left “disappointed” by the removal of an article aimed at aligning a proportion of directors’ bonuses with the company’s climate targets and transition plans. ”Compensation is a powerful tool to drive corporate behaviours,” Eurosif said in a statement.
We just had the vote in @EP_Economics on my opinion on the corporate sustainability due diligence #CSDDD. No carve-out for financial services, no time-limitation for due diligence obligations but tailor-made ones. The attempt by EPP, ECR & ID to water down the proposal failed! pic.twitter.com/ANpplK6iOl
— René Repasi (@repasi) January 24, 2023