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

On 23 November 2022, the European Financial Reporting Advisory Group (“EFRAG“) submitted the first set of draft EU Sustainability Reporting Standards (“ESRS“) to the European Commission.

As discussed in our previous blog post (which you can read here), the draft ESRS – which in-scope entities will be required to report against under the Corporate Sustainability Reporting Directive (“CSRD“) – were released on 29 April 2022 and made available for public consultation until 8 August 2022. Following the end of the public consultation, EFRAG amended the ESRS and approved updated versions on 16 November 2022. EFRAG subsequently submitted the updated draft ESRS to the European Commission.

The CSRD was adopted by the Council of the European Union on 28 November 2022, meaning the requirement to report against the ESRS will apply in stages from 2024, with first submissions due in 2025 (for more information on the CSRD, read our legal update here).

Continue Reading The European Financial Reporting Advisory Group submits draft European Sustainability Reporting Standards to the European Commission

On 10 November 2022, the EU Parliament adopted the Corporate Sustainability Reporting Directive (“CSRD“). The EU Council is expected to adopt the CSRD on 28 November 2022, after which it will be published in the Official Journal. The CSRD will then enter into force 20 days after publication and EU member states will have 18

On 3 October 2022, the European Commission (“Commission”) adopted a revised notice on informal guidance (“Revised Notice”) that provides an expanded mechanism for businesses to obtain enhanced comfort – through so-called “guidance letters” – on the application of the EU competition rules to novel or unresolved questions.

The Revised Notice permits businesses that have doubts

Companies have long been awaiting some more clarity on their reporting obligations vis à vis the German Supply Chain Due Diligence Act (SCDDA). The BAFA has now shed some light on what is expected of the reporting entities by publishing 38 detailed questions (in addition to some general information on the reporting entity) covering the whole spectrum of due diligence obligations under the SCDDA. 

Continue Reading Business and Human Rights: Supply Chain Due Diligence – Questionnaire for reporting published by German authority

Interest in ESG investing continues to attract attention globally as policymakers and regulators around the world implement policies and regulations to direct or guide behavior and protect the interests of a wide range of stakeholders. Against this backdrop, we observe a rising challenge to so-called “woke capitalism”, particularly with the recent wave of anti-ESG sentiment

Investors across the globe are increasingly putting pressure on legislators to mandate human rights and environmental due diligence (“HREDD“). The UK Government has not been immune from such pressure.

As highlighted in our earlier blog post, in early September 2022, a group of 47 companies, investors, business associations and initiatives operating in

On 17 August 2022, the Federal Office for Economic Affairs and Export Control (Bundesamt für Wirtschaft und Ausfuhrkontrolle, “BAFA”) has issued its first handout to provide guidance to companies currently implementing a risk management system to comply with the German Supply Chain Due Diligence Act (“SCDDA”). The document is aptly titled

In response to growing investor demand for information concerning companies’ sustainability-related financial risks, the sustainability disclosure landscape has rapidly changed over the last decade.  In what marks one of the latest developments to the sustainability disclosure landscape, on 29 April 2022, the European Financial Reporting Advisory Group (“EFRAG“) – a private organisation that provides technical assistance to the European Commission – issued its initial draft European Sustainability Reporting Standards (“ESRS“) for public comment. The ESRS, which EFRAG were tasked with preparing by the European Commission as part of the proposed Corporate Sustainability Reporting Directive (“CSRD“), set out proposed requirements for companies to report on sustainability-related impacts, opportunities and risks under the CSRD.

Continue Reading The European Financial Reporting Advisory Group issues draft European Sustainability Reporting Standards

On 23 February 2022, the European Commission published its much-anticipated draft corporate sustainability and due diligence directive (the “Draft Directive”).  The Draft Directive sets out a proposed EU standard for human rights and environmental due diligence (“HREDD”) which, importantly, would apply to any non-EU-based company and its subsidiaries  if those group companies have aggregate annual net turnover in the EU of:

  • more than EUR 150 million (Group 1); or
  • more than EUR 40 million with at least 50% of net worldwide turnover generated in a “high-risk” sector which includes textiles, clothing and footwear, agriculture, forestry, fisheries, food & extractives (Group 2).

Notably, the HREDD applies even if a company and its subsidiaries do not have a physical presence in the EU, if the above net turnover threshold is met.

The Draft Directive requires both Group 1 and Group 2 companies to take appropriate measures to identify, and mitigate, actual and potential adverse human rights and environmental impacts arising from their own operations anywhere in the world (not just in the EU) and, where related to their value chains, from their “established business relationships”.

Colleagues from our offices throughout the world have prepared briefings which are specific to particular locations, giving insights into related matters in those jurisdictions.

Continue Reading Human Rights and the Environment – What non-EU-based companies need to know regarding the EU draft Corporate Sustainability Due Diligence Directive