Companies and investors call for effective EU corporate accountability legislation
In February 2022, more than 100 companies, investors, business associations and initiatives released a joint statement. In the statement, they ask the EU to swiftly adopt a legislative proposal on mandatory human rights and environmental due diligence (mHREDD), within the Sustainable Corporate Governance initiative. Signatories to the statement include Aviva, Danone, Ericsson, IKEA, Hapag-Lloyd and VAUDE. They all express concern about the setbacks to the twice-delayed proposal, now expected later this month.
The statement, signed by companies and investors from various industries and countries, including many SMEs, defines five key principles to be included in the legislation, so as to make it effective:
- Alignment of the legislation with the UNGPs to cover all businesses operating in the EU market, regardless of sector and size;
- Due diligence obligation that extends across the full value chain;
- Mandatory requirements that go beyond tick boxing, address irresponsible purchasing practices, and are embedded in appropriate governance structures including at board level;
- Effective and safe stakeholder engagement as an integral part of due diligence; and
- Reliable accountability mechanisms, including strong civil liability provisions
Similar EU-facing statements endorsing due diligence legislation including civil liability have been also released by, among others, a group of cocoa companies and 94 investors with over USD 6 trillion in assets under management.
In 2021, mHREDD laws were passed in Germany and Norway, while similar laws are under consideration in the Netherlands and Finland. The EU’s Sustainable Corporate Governance initiative can help create a Europe-wide level playing field for mHREDD and corporate accountability Tweet This! and drive better outcomes for people and the planet across global value chains.
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This article is based on published information by Business & Human Rights Resource Centre. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the publication’s meaning. If you would like to quote these written sources from the original please revert to the following link:
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