Leading NGOs working on corporate sustainability and sustainable finance have published a briefing with key recommendations to help clarify directors’ responsibilities to oversee sustainability that fully fit with existing company law and corporate governance frameworks across Europe.
The briefing follows a public letter sent by NGOs to DG Justice Commissioner Didier Reynders and Executive Vice-President Frans Timmermans in support of the EU Commission plans on Sustainable Corporate Governance (SCG) and responding to recent criticism.
The SCG initiative, which was included in the Sustainable Finance Action Plan and the EU Green Deal, is set to provide solutions to two issues:
The NGOs are presenting detailed recommendations for the latter part of the initiative. The involvement of boards is paramount to ensure that companies are able to consider and take the necessary strategic decisions with regards to the management of sustainability risks and impacts, and integrate them in overall corporate strategies and business operations.
More specifically, our recommendations tackle the need for coherence and alignment within the corporate and financial market regulatory framework in Europe. In this regard, connecting the dots between companies’ sustainability reporting and upcoming due diligence obligations requires effective governance and oversight from the company’s senior management and the board. Our proposals are therefore divided into two categories to ensure an effective reform:
Filip Gregor, Head of Responsible Companies Section at Frank Bold, states: Board members already have wide discretion to take account of sustainability matters. However, as shown by the Alliance for Corporate Transparency research on 1000 large EU corporations’ non-financial (sustainability) reports, less than 15% of companies provide insights on the integration of sustainability in core business strategy, Board discussions, and performance incentives. The solution to this gap in practice is simple. To bring sustainability on the board's agenda, withing the existing directors' duties, the European Commission's sustainable corporate governance reform should specify board's procedural obligation to provide oversight of corporate sustainability risk management and due diligence obligations."
If you have any questions, please write to susanna.arus@frankbold.org
The International Corporate Accountability Roundtable (ICAR) along with the European Coalition for Corporate Justice (ECCJ) and the Canadian Network on Corporate Accountability (CNCA) launched a report by International Experts on Business and Human Rights, entitled “Human Rights Due Diligence: the Role of States”. The International Experts commissioned included Professor Olivier De Schutter, Professor Anita Ramasastry, Mark B. Taylor and Robert C. Thompson.
The International Corporate Accountability Roundtable (ICAR), the European Coalition for Corporate Justice (ECCJ) and the Canadian Network on Corporate Accountability (CNCA), are pleased to announce the launch of our Human Rights Due Diligence Report, the common approaches and available options resulting from the “Human Rights Due Diligence Project.”
Environmental Law Service is co-organising a half-day conference on lobbying transparency, ethics regulation and citizens participation, taking place in Brussels on 16 November.
