Thursday, June 17, 2021

EU Signals New Mandatory ESG (environmental, social and governance) Due Diligence for Companies Operating in EU | Shearman & Sterling

EU Signals New Mandatory ESG Due Diligence for Companies Operating in EU | Shearman & Sterling
"On March 10, 2021, the European Parliament adopted a resolution calling for mandatory human rights, environmental and governance due diligence standards across the value chain for companies operating in the EU internal market ...
If adopted, all EU Member States will be required to implement the Directive into their national laws. This will result in substantive due diligence requirements being imposed on companies, whether based in the EU or selling their products and services into the EU, across their entire value chain, with potential sanctions for non-compliance.
...The proposed due diligence framework targets three categories of “potential and/or actual adverse impacts,” namely, those on:
  • human rights, as embodied in international human rights treaties, including social, worker and trade union rights;
  • the environment, by reference to internationally recognized and EU environmental standards, including the right to a safe, clean, healthy, sustainable and biodiverse environment. The Resolution refers specifically to climate change, and stresses that corporate due diligence laws must be in line with the goals of the Paris Agreement; and
  • good governance, including compliance with anti-corruption, bribery and money laundering laws...Read all.
"The radical ‘Great Reset’ movement is on the verge of becoming the law in Europe, and if it happens, it's likely America will be dragged along with it. 
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