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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:
A proposal released today by the European Commission to require large European companies to report on environmental and social issues will not guarantee ethical corporate behaviour according to the European Coalition for Corporate Justice (ECCJ). [1]
We are at a moment in history when we need our corporate businesses more than ever to help us cope with the challenges ahead. We, as a society, though, need to be clear in our understanding of the basis upon which society grants the privileges that now accompany the modern corporate form.
The European Coalition for Corporate Justice represented by the Environmental Law Service, the International Corporate Accountability Roundtable, and the Corporate Responsibility Coalition are proud to announce the launch of the Access to Judicial Remedy Project.
