{"id":6866,"date":"2022-03-09T10:48:33","date_gmt":"2022-03-09T10:48:33","guid":{"rendered":"https:\/\/twentyfifty.co.uk\/?p=6866"},"modified":"2023-02-24T12:26:48","modified_gmt":"2023-02-24T12:26:48","slug":"dont-delay-new-eu-due-diligence-legislation-is-underway","status":"publish","type":"post","link":"https:\/\/twentyfifty.co.uk\/2022\/03\/dont-delay-new-eu-due-diligence-legislation-is-underway\/","title":{"rendered":"Don\u2019t delay, new EU due diligence legislation is underway"},"content":{"rendered":"

VIEWS<\/strong><\/p>\n

Don\u2019t delay,
\nnew EU due diligence legislation is underway<\/h1>\n<\/div><\/div><\/div><\/div>

\"\"<\/p>\n<\/div><\/div><\/div><\/div><\/div><\/div>

\n
\n\t

9 March 2022<\/strong><\/p>\n

On 23 February 2022, the European Commission published a long-awaited proposal for an EU Corporate Sustainability Due Diligence Directive (draft Directive). It could be 2-3 years before we can expect to see a final version, but it has the potential to transform the European economy.<\/p>\n

The draft Directive has arrived at an already changing and uncertain regulatory landscape. In the last year, Germany<\/a> and Switzerland<\/a> have adopted new laws that raise the bar for human rights and environmental corporate due diligence. Many European companies are already investing significant resources to prepare for these new national requirements that come into force in 2023.<\/p>\n

As the draft Directive is likely to change, some companies may choose to only focus on their national legislation. That could prove short-sighted. We recommend business leaders take a step back to consider the potential long-term impacts the draft Directive will have and ensure that the systems they set up now, are still fit for purpose when the final Directive comes into force.<\/p>\n

Here are our three key takeaways to help companies take their next steps.<\/p>\n

1) The draft Directive has the potential to transform the European economy<\/h4>\n

It is important to consider the draft Directive as one element of an emerging transformative European policy landscape, where businesses are being asked to align their corporate strategies and investments with social, environmental and climate goals.<\/p>\n

The draft Directive itself presents an ambitious ask to companies as leaders rethink and reset the way they do business. They will need to find new ways of integrating human rights, climate and environmental issues into one overarching corporate sustainability due diligence approach that informs and is integrated into their business strategy.<\/p>\n

But the Directive is not alone, the EU Commission has mapped out how the draft Directive complements other policy provisions including the ambitiously revised Non-Financial Reporting Directive, the EU Taxonomy Regulation or the Sustainable Finance Regulation. Taken as a whole, this promises a significant shift in the European economy.<\/p>\n

2) Sustainability becomes part of a directors\u2019 duty of care<\/h4>\n

This draft Directive not only asks companies to incorporate human rights, environment, and climate goals into business strategy but also links it to directors\u2019 duty of care.<\/p>\n

Based on the current version of the EU proposal, company directors should expect to see the following additions to their duties:<\/p>\n