The engine that powers sustainable organisations
After being postponed twice, the EU Commission is expected to finally present its proposal for the “Sustainable Corporate Governance Initiative” on 15 February. The goal of the initiative is to embed sustainability as an integral aspect of corporate governance and trigger behavioural change in businesses by addressing due diligence for environmental and human rights impacts.
If the following applies to your company, Sustainable Corporate Governance Directive will apply to you:
High risk sector are for example the textile industry, mining or agriculture.
The proposal is still subject to negotiations between the Council of the EU and the European Parliament, so these requirements may still change in the coming months.
The aim of the Sustainable Corporate Governance Directive is similar to the German supply chain law called "Lieferkettengesetz." Both require companies to establish due diligence procedures to address any negative impacts on:
Companies are also expected to publicly share their due diligence strategy, engage with stakeholders, and have a system in place for stakeholders to voice concerns. Furthermore, affected companies should provide ways to rectify any harm caused.
To ensure adequate supervision and enforcement of the rules, European member states will be required to establish an adequate supervision system and provide proportionate sanctions. The penalties in the German supply chain law can amount to up to 2 percent of the annual turnover.
Together with experts from large, medium-sized and small companies with experience in sustainability reporting, we provide software solutions that makes it easier for you to implement the new directive.