Members of the Informal Group on Sustainable Finance have published recommendations to strengthen the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), for which the European Council recently adopted its negotiating position. ShareAction, Accountancy Europe, Eurosif, Frank Bold, Finance Watch and WWF have called on the European Commission to legally mandate corporate directors’ responsibilities “to oversee the various steps of due diligence”, including setting and implementing sustainability targets and transition plans. The group has further recommended all qualifying companies should be required to produce transition plans, tie a “significant portion” of directors’ variable remuneration to sustainability targets, and “stipulate robust due diligence obligations for financial institutions in consideration of their specificities and various asset classes. It is important that the CSDDD fosters a risk-based approach based on UN and OECD standards that require companies to address and mitigate environmental and human rights impacts covering companies’ subsidiaries and global value chains, both upstream and downstream, the group added. The joint statement said environmental, climate and social risks should be “duly considered” and embedded into companies’ long-term strategy, business model, financial and investment planning. It added: “Appropriate risk identification and assessment processes and clear responsibilities are essential for adequate management and mitigation of sustainability risks and impacts. Moreover, the establishment and communication of due diligence processes and results thereof are critical for allowing investors and other relevant stakeholders to understand and assess companies’ strategic approach to sustainability.”
We have signed a joint statement for a strong #EU law on Corporate Sustainability Due Diligence #csddd
We provide key recommendations to fill the gaps & truly integrate sustainability requirements into companies' decisions-making🌱https://t.co/JoiFHEgkjZ pic.twitter.com/vcuBWGnYQt
— ShareAction (@ShareAction) December 8, 2022
