Spain proposes exempting financial firms from due diligence rule (2023)
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Spain proposed on November 9 exempting financial institutions from the E.U.’s new Corporate Sustainability Due Diligence Directive (CSDDD), which will require corporations to ensure they have no connections to human rights abuses, certain types of environmental pollution, or other businesses with ties to such activity:
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Spain, which holds the European Union’s rotating presidency, has proposed that financial firms be excluded from the initial roll-out of the Corporate Sustainability Due Diligence Directive, according to a Nov. 9 draft proposal seen by Bloomberg. The proposal still requires the approval of member states and lawmakers. CSDDD, which the EU plans to use as a tool to force all industries to pay more attention to the value chains connected to their operations, has the potential to expose firms to unprecedented legal risk. If a single link in a firm’s value chain is tied to human rights abuses, environmental destruction or similar acts, Brussels wants to hold the EU-based business accountable. The finance industry has lobbied hard against being included in the scope of the directive, arguing that such a wide-reaching rule is reasonable to consider for manufacturers, but not for banks, asset managers and insurers. The negative fallout would be “huge,” Philippe Angelis, senior policy adviser for corporate reporting and sustainable finance at Insurance Europe, said earlier this year.[1] |
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European companies may not be the only ones affected under the CSDDD, according to U.S. Treasury Secretary Janet Yellen, who over the summer “warned of the potential ‘negative, unintended consequences’ facing US firms because of CSDDD.”
See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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