EU Parliament backs proposed directive


The legislation is about integrating human rights and environmental impact into companies’ governance.

There were 366 votes in favour of adopting the proposal, 225 against and 38 abstentions.

MEPs have long been calling for more corporate accountability and mandatory due diligence legislation.

The original EU Commission proposal​​ was introduced in February 2022; the policymakers said the new rules complement other existing and upcoming legislative acts, such as the deforestation regulation​​, conflict minerals regulation and draft regulation prohibiting products made with forced labour.

Under new rules, companies will be required to identify, and where necessary prevent, end or mitigate the negative impact of their activities on human rights and the environment such as on child labour, slavery, labour exploitation, pollution, environmental degradation and biodiversity loss.

Firms will also have to monitor and assess the impact of their value-chain partners including not only suppliers but also sale, distribution, transport, storage, waste-management, and other areas.

The new rules will apply to EU-based companies, regardless of their sector, including financial services, with more than 250 employees and a worldwide turnover over €40m as well as to parent companies with over 500 employees and a worldwide turnover of more than €150m.

Non-EU companies with a turnover higher than €150m, if at least €40m of that amount was generated in the EU, will also be included.

Companies will also have to implement a transition plan to limit global warming to 1.5° and, in the case of large companies with over 1000 employees, meeting the plan’s targets will have an impact on a director’s variable remuneration such as bonuses.

Source link

Tags: No tags

Comments are closed.