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As part of its strategy to implement the European Green Deal and the Action Plan on Financing Sustainable Growth, the European Commission presented its proposal for a Corporate Sustainability Due Diligence Directive (CSDDD).
This paper specifically addresses the parts of the proposal that relate to corporate governance and directors’ obligations, as well as to the responsibilities of the financial sector. It intends to complement the analyses of non governmental and expert organisations on the due diligence aspects.
1. Directors’ obligations as part of due diligence
2. Directors’ obligations with regard to climate change
3. Alignment of incentives to sustainability objectives
4. Responsibilities of the financial sector
In the explanatory memorandum of the draft CSDDD, the EU Commission recalls that one of the five specific objectives of the directive is “(1) improving corporate governance practices to better integrate risk management and mitigation processes of human rights and environmental risks and impacts, including those stemming from value chains, into corporate strategies”. However, the proposal initially referred to as 'Sustainable Corporate Governance' has been presented with only a few elements to foster integration of sustainability and long-term thinking in corporate governance rules. It is important that corporate governance keeps pace with sustainable finance and the demands of stakeholders and investors, which themselves have supported the call on clarifying directors’ obligations.
Briefing supported by:
On September 28, Frank Bold will hold the Creating Sustainable Companies Summit gathering leading thinkers, businesses, policymakers and civil society in Brussels to chart the way to the next generation of corporations and future of corporate governance.
The Brussels office of the public interest law firm Frank Bold is currently recruiting a Legal Research Intern to start immediately full-time, for a period of two months, with the possibility of a four-month extension.
Frank Bold has recently become a certified B Corporation for its activities as a law firm. This new status reflects the firm’s general policy of combining its business activities with socially valuable objectives.
