NGOs applaud EU’s plan for sustainable business law
Posted on 24 June 2020
The laws must do two separate, complementary things.
Plans for a new EU law to require businesses to be run more sustainably have been heralded as “very important” by 45 organisations.
In an open letter the organisations, including WWF, congratulate EU Justice Commissioner Reynders for the decision to propose legislation on both corporate due diligence and directors’ duties. The new laws will be part of a broader initiative on making corporate governance more sustainable as part of the European Green Deal. However, they warn that the laws on ‘sustainable corporate governance’, expected in 2021, must be a strong legal framework which does two separate, complementary things. Firstly, it must bring in new mandatory due diligence requirements on human rights and the environment, and secondly, ensure firms are managed sustainably.
Julia Linares, Sustainable Finance Policy Officer at WWF European Policy Office said: “Changing corporate governance is the key to unlocking more socially and environmentally responsible company behaviour, so we’re very pleased with the announcement of this initiative. Protecting people and the planet across the spectrum, and also requiring boards to run their businesses sustainably and be accountable for their actions, are the two critical pieces in the jigsaw. We are eager to see the two new legislative proposals by early next year” . The EU Commission is also planning a law to tackle deforestation associated with products placed on the EU market, which is complementary to the corporate governance initiative (see WWF’s asks on this law). If it’s done right, it should also help protect human rights and the environment outside the EU, in particular in agriculture.