DG Grow and DG Justice Join Forces on the Sustainable Corporate Governance Initiative
Thierry Breton, Commissioner for Internal Market (DG GROW), has joined Didier Reynders, Commissioner for Justice and Consumers (DG Justice), in the preparation of the comprehensive proposal on due diligence due in Q2/Q3 2021.
Announced by Commissioner Reynders in April 2020, the Sustainable Corporate Governance Initiative has been in the making since last year and saw European policymakers striving for a more harmonized approach due to the wide variety of stakeholders impacted.
The initiative will include a future EU law on Due Diligence together with specific requirements on directors’ duties and corporate governance at large. According to the information available so far, the proposal will most likely:
Be mandatory and horizontal (cross-sectoral).
Be applicable to companies of all sizes, including SMEs.
Be applicable to EU domiciled as well as companies domiciled elsewhere that engage in business within the EU internal market.
Include administrative fines, civil (and criminal?) liability for harms suffered as a result of a failure to meet the due diligence obligation.
Be proportional to companies’ size and resources, but those operating in riskier sectors would need to do more.
Include rules for third countries.
More recently, on 13th July 2021, the Commission published a Guidance for business on forced labour due diligence as a follow-up to the EU Trade Policy Review Communication.
The guidance offers to EU businesses support in taking the appropriate measures on the basis of the international due diligence guidelines and principles. At the same time, the document is intended to bridge the time until legislation is in place.
For more information:
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