On 9 June 2023, the European Union published Regulation (EU) 2023/1115 on the making available on the Union market and the export from the Union of certain commodities and products associated with deforestation and forest degradation (the “Deforestation Regulation” or the “EUDR”). The EUDR entered into force on 29 June 2023, although the main prohibitions

On March 5, 2024, the European Parliament and the Council of the European Union reached a “political agreement” on a Regulation prohibiting products made with forced labor on the European Union (“EU“) market.1 While binding legislation was initially proposed by the European Commission (“Commission“) in September 2022 (see Legal Update

On 20 December 2023, the Council of the EU reached an agreement on its negotiating mandate on a proposal for a regulation on ESG ratings  (the “Proposed EU Regulation“). This builds on the European Commission’s proposal, which was published on 13 June 2023.

The EU’s desire to regulate ESG rating agencies is a response to increasing concerns from a variety of stakeholders about the reliability, comparability and transparency of ESG ratings and the data behind these ratings.Continue Reading Council of the EU agrees on proposal to regulate ESG ratings providers

On 14 December 2023, following several rounds of inter-institutional negotiations, the European Council of the European Union (Council) and the European Parliament (Parliament) announced that a political agreement had been reached on a Directive on Corporate Sustainability Due Diligence (CS3D).  The European Commission (Commission) had initially published its proposal for CS3D on 23 February 2022, with the Council and the Parliament issuing their own positions on the text on 30 November 2022 and 1 June 2023, respectively (see our previous blogs, here, here and here).

Inspired by the 2017 French law on Corporate Duty of Vigilance and the 2021 German Supply Chain Law (see our previous blog post), and in response to growing stakeholder expectations and demands in the EU and globally, CS3D sets out EU standards for human rights and environmental due diligence (HREDD), requiring in-scope companies to mitigate their negative impact on human rights and the environment with respect to their own operations, those of their subsidiaries and those carried out by their business partners. In so doing, CS3D seeks to provide legal certainty and a level playing field as regards corporate supply chain obligations.Continue Reading Human Rights and the Environment – EU Institutions Reach Political Agreement On Corporate Sustainability Due Diligence Directive

On 31 May 2023, the European Parliament and the Council of the European Union adopted Regulation (EU) 2023/1115 regarding the marketing and export of certain commodities and products associated with deforestation and forest degradation from the European Union. In this Legal Update, we delve into the regulation and highlight what operators and traders should know

On 1 June 2023, the European Parliament (the “EP“) plenary session adopted its proposed amendments to the draft EU Corporate Sustainability Due Diligence Directive (“CSDDD“).

The adopted text largely mirrors the version voted on by the EP’s Legal Affairs Committee in April 2023 (which we discussed in our earlier blog post), in that it confirms that:

  • asset managers and institutional investors will be in-scope;
  • the due diligence requirements will apply to: (i) EU companies with over 250 employees and a global turnover of over €40 million; (ii) parent companies with over 500 employees and a global turnover of over €150 million; and (iii) non-EU companies with a global turnover of over €150 million if at least €40 million of this was generated in the EU; and
  • directors of companies with more than 1,000 employees will be responsible for ensuring the company implements a transition plan that is compatible with the goals of the Paris Agreement.

The adopted text also confirms that non-compliant companies may be liable for damages and could be sanctioned by the national supervisory authorities of EU member states. Sanctions include taking a company’s goods off the market and/or the imposition of fines of at least 5% of a company’s net global turnover. Non-EU companies that fail to comply may also be banned from public procurement in the EU.Continue Reading Human Rights and the Environment – European Parliament adopts amendments to draft Corporate Sustainability Due Diligence Directive

The European Union has agreed on the final version of its Carbon Border Adjustment Mechanism (“CBAM”). The CBAM will apply to a limited set of products (cement, aluminium, fertilisers, electric energy production, hydrogen, iron and steel, as well as some “precursors” such as cathode active materials and a limited number of downstream products)

On 25 April 2023, the European Parliament’s Legal Affairs Committee voted in favour of a revised version of the EU draft Corporate Sustainability Due Diligence Directive (“the Draft Directive”).

The revised version differs from the versions that we have previously commented on here, here and here in the following key respects:

  • Inclusion

On 24 January 2023, each of the European Parliament’s trade committee and economic affairs committee reached agreed positions on the financial aspects of the draft Corporate Sustainability Due Diligence Directive (the “Draft Directive”). The agreed positions mark a departure from the European Commission’s and the Council of the European Union’s previous positions on the

On 30 November 2022, the Council of the European Union (the “Council”) adopted its negotiating position on the European Commission’s proposal for a corporate sustainability and due diligence directive (the “Draft Directive”). As discussed in our previous blog posts (which you can read here and here), the proposed Draft Directive set out an EU standard for human rights and environmental due diligence (“HREDD”) and required EU member states to introduce legislation making in-scope companies responsible for violations of HREDD standards across their entire value chain. This meant that companies would have to conduct HREDD on their suppliers and clients, and could be held liable for how their products and services are used and disposed of. Although the fundamental principles of the proposed Directive remain intact, the Council’s suggested amendments to the Draft Directive do include some important changes.Continue Reading Human Rights and the Environment – EU Council responds to the draft Corporate Sustainability Due Diligence Directive