In recent years, EU Institutions have been asking large companies operating in the EU to assume an increasingly responsible attitude towards the protection of human rights and the environment.
In this regard, on June 1, 2023, the European Parliament adopted the amendments to the Corporate Sustainability Due Diligence (CSDD) Regulation and amending Directive. This Directive – proposed by the European Commission on 23 February 2022 – was aimed at introducing a new and harmonized concept of Corporate Due Diligence in matters of sustainability and responsibility for the violation of human rights and environmental protection.
The amendments expand the application of the Directive to EU-based companies with more than 250 employees and a net annual revenue worldwide of at least 40 million euros . These could be held to account for violations of human rights and environmental degradation commited by their partners.
The Directive also applies to insurance companies, with respect to whom however, there are less stringent obligations than other financial operators. The obligation of these Companies is that they monitor their direct customers and introduce a transaction plan in order to verify the progress of the climate commitments undertaken.
To reach agreement on the text, Interinstitutional Negotiations with the Council and the European Commission will take place and should be concluded by the end of this year.