Eurosif welcomes new EU rules on sustainability due diligence
The political agreement reached today on the Corporate Sustainability Due Diligence Directive (CSDDD) is a major milestone to advance a just transition to a sustainable economy.
The CSDDD is a groundbreaking regulation establishing rules to ensure large EU companies effectively identify, prevent, mitigate, report, and bring to an end adverse human rights and environmental impacts caused by their economic activities. Therefore, it is expected to help companies better manage their sustainability risks and mitigate and address negative impacts on people and the planet.
Major achievements include requiring large companies to establish and put into effect transition plans, including emission reduction targets in line with the Corporate Sustainability Reporting Directive and the objectives of the Paris Agreement. This requirement will also apply to large financial institutions, which is welcome given their important role in financing the transition.
Eurosif also welcomes the inclusion of large financial institutions in due diligence requirements but we regret this is confined to their upstream value chain and own operations only. This de facto excludes investments, loans and insurance activities. Meanwhile, due diligence is already part of responsible investors’ toolkit and essential for sound risk management. We hope these requirements can be extended to financial institutions’ entire value chain during the review foreseen in the agreement.
Aleksandra Palinska, Executive Director of Eurosif said: “We congratulate EU co-legislators on having reached an agreement on this crucial piece of legislation which is a key milestone to end serious environmental harm and human rights breaches and advance a just transition to a sustainable economy. We now call for a swift finalisation of the technical details and a timely adoption ahead of the end of this Parliament's mandate. Appropriate transposition and implementation of the rules is also essential to unleash their transformative potential”.
Read the full press release at the link below.