In light of the severity and the short timeframe that remains to take action to limit global warming to 1.5 degrees, it is important that the EU Corporate Sustainability Due Diligence Directive (CSDDD) leaves no legal ambiguity concerning corporate obligations regarding climate change.
In light of the severity and the short timeframe that remains to take action to limit global warming to 1.5 degrees, it is important that the EU Corporate Sustainability Due Diligence Directive (CSDDD) leaves no legal ambiguity concerning corporate obligations regarding climate change. The aim of this paper is to provide recommendations on Article 15 "Combating climate change" of the Commission’s proposal which lacks precision regarding the targets and content of the transition plans it refers to. The Corporate Sustainability Reporting Directive (CSRD) already provides a baseline for coherence. CSDDD should not fall behind that baseline, in order for both legislations to support the effectiveness of one another.
These recommendations on Article 15 need to be accompanied by changes to Article 3 of the proposed CSDDD, that would ensure a comprehensive approach to the definition of environmental adverse impacts. The definition should not only capture the effect that companies have on all three - the environment, climate and human rights - but also how these are interdependent and what damage prevention entails.
The experience with the implementation of the Non-Financial Reporting Directive (NFRD) and the analysis of the current status of companies’ sustainability reporting indicates that without clearer legal requirements, no guidance, no matter how good, will have substantial effect on the quality of companies reporting.
Over 20 leading NGOs working on corporate transparency have published a statement calling on EU policy-makers to define companies’ disclosure obligations on sustainability issues on the occasion of tomorrow’s high-level conference on the future of corporate reporting hosted by the European Commission in Brussels.
A large group of civil society organisations have today set out their joint vision of what sustainable finance in Europe should look like, ahead of political transitions in the EU.
