A recent draft proposal presented by the executive arm of the European Union asks that some primary points in the Corporate Sustainability Due Diligence Directive be amended. The Corporate Sustainability Due Diligence Directive is focused on fostering responsible and sustainable corporate behavior in firms’ operations and across their international value chains.
This ESG regulation entered into force on July 25th last year and applies to large limited liability companies and partnerships in the European Union, as well as large non-EU enterprises.
The proposed changes to the directive include:
- Abolish aspects of the civil liability clause and the regulations concerning representative actions
- Eliminating a review clause that discusses the extent to which financial services companies might be in scope in the future
- Limit the concept of due diligence so that it solely applies to direct business partners
- Widen the scope of maximum harmonization to make sure the directive aligns with other rules
- Restrict the notion of ‘stakeholder’ and further limit the due diligence process’ stages that need stakeholder engagement
- Eliminate the obligation to terminate business ties as a measure of last resort
- Widen the intervals in which firms need to monitor the effectiveness and adequacy of their due diligence measures
- Get rid of the minimum cap for fines and shed light on the principles around monetary penalties
These amendments are being criticized by civil society groups that had been calling for the European Union to adhere to the directive’s original principles. Head of EU policy at ShareAction, Maria van der Heide, adds that the planned amendments look reckless. Van der Heide explains that the amendments amount to deregulation, rather than simplification of the directive.
This news comes as pressure on the bloc increases, both from outside and within Europe, to limit the scope of this legislation. Companies in the European Union warn that complying with this regulation will make it difficult for them to compete with Asia and the United States. Over in France, officials have even asked that the directive be withdrawn.
Meanwhile, Trump’s pick for commerce secretary, Howard Lutnick, revealed that he would consider utilizing trade tools to ensure American firms that operate in the EU market weren’t expected to adhere to the directive.
In other news, the European Commission is expected to make public its proposal for the omnibus package this week. The package is expected to explore how the EU’s Taxonomy Regulation and the Corporate Sustainability Reporting Directive can be simplified.
It would be interesting to hear what North American firms like Aston Bay Holdings Ltd. (TSX.V: BAY) (OTCQB; ATBHF) think about the push to soften some of the ESG reporting regulations of the EU in light of the pushback that European companies exerted when those rules were passed.
NOTE TO INVESTORS: The latest news and updates relating to Aston Bay Holdings Ltd. (TSX.V: BAY) (OTCQB: ATBHF) are available in the company’s newsroom at https://ibn.fm/ATBHF
About ESGWireNews
ESGWireNews (“ESG”) is a specialized communications platform with a focus on the Environmental, Social and Governance (ESG) sector and public companies committed to sustainable corporate practices. ESGWireNews is one of 70+ brands within the Dynamic Brand Portfolio @ IBN that delivers: (1) access to a vast network of wire solutions via InvestorWire to efficiently and effectively reach a myriad of target markets, demographics and diverse industries; (2) article and editorial syndication to 5,000+ outlets; (3) enhanced press release enhancement to ensure maximum impact; (4) social media distribution via IBN to millions of social media followers; and (5) a full array of tailored corporate communications solutions. With broad reach and a seasoned team of contributing journalists and writers, ESG is uniquely positioned to best serve private and public companies that want to reach a wide audience of investors, influencers, consumers, journalists and the general public. By cutting through the overload of information in today’s market, ESG brings its clients unparalleled recognition and brand awareness. ESG is where breaking news, insightful content and actionable information converge.
To receive SMS alerts from ESGWireNews, text “ESG” to 888-902-4192 (U.S. Mobile Phones Only)
For more information, please visit https://www.ESGWireNews.com
Please see full terms of use and disclaimers on the ESGWireNews website applicable to all content provided by ESG, wherever published or re-published: https://www.ESGWireNews.com/Disclaimer
ESGWireNews
Los Angeles, CA
www.ESGWireNews.com
310.299.1717 Office
Editor@ESGWireNews.com
ESGWireNews is powered by IBN
