European Green Deal

Sustainability in Supply Chains

To deliver on the UN Sustainable Development Goals, the EU submitted its strategy for climate neutrality by 2050 to the United Nations Framework Convention on Climate Change in March 2020. The Communication on the European Green Deal sets out that “sustainability should be further embedded into the corporate governance framework, as many companies still focus too much on short-term financial performance compared to their long-term development and sustainability aspects”.

This autumn the European Commission is expected to publish a respective proposal for a directive on sustainable corporate governance. This initiative aims to introduce new rules on how sustainability should be incorporated into business strategies, including both: new due diligence rules to curb environmental and labor abuses in corporate supply chains as well as new corporate directors’ duties to integrate mandatory sustainability criteria into their decision-making. Extending the obligations of the recent German supply chain law, the EU is expected to propose private liability provisions and expand the requirements further down the tiers of the supply chain – to identify, assess and mitigate adverse impacts in the chain.

Against the background of the German law, we will discuss the pending EU proposal and the relevant issues with Lucrezia Busa, competent member of the team of responsible Commissioner Didier Reynders, and Axel Voss, Member of the European Parliament, coordinator in the Legal Affairs Committee for the European People’s Party and shadow rapporteur on corporate due diligence and corporate accountability.

The impact on obliged sectors and companies will become clear and potential changes during the upcoming legislative process will be discussed.

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