Ten organisations with a wide range of interests gave their support to the European Commission’s forthcoming initiative on sustainable corporate governance (see EUROPE 12552/15) on Tuesday 8 June and set out their expectations in a joint statement. The legislative proposal was scheduled for June, but it is not expected to be ready until after the summer.
“The European Commission’s initiative will be critical to ensure the company’s governance framework allows its Board and senior management to better consider environmental and social risks”, write ACCA, Accountancy Europe, CDSB, Eurosif, PGGM, WWF, Schroders, WBA , and ShareAction.
According to these organisations, the future proposal should, among other things, clarify the responsibilities of the board of directors in monitoring environmental, social, and governance issues.
In addition, managers should be responsible for leading the development and implementation of a corporate sustainability strategy, which would reflect the key risks and impacts identified by the company. The organisations also believe that the remuneration system for managers should be linked to the achievement of clear objectives, defined by the company in its sustainability strategy.
It should be noted that these organisations also support the development of a European framework on due diligence in corporate supply chains to address negative impacts on human rights and environmental issues (see EUROPE 12705/14).
They also stress the importance of ensuring coherence between this future proposal and other legislation, such as the proposal for a Corporate Sustainability Reporting Directive (see EUROPE 12703/10) and the EU taxonomy to avoid duplication and confusion.
The corporate sustainability reporting initiative is not unanimously supported by stakeholders. In early May, seven business and retail investor organisations wrote to the European Commission expressing their concerns about the future text (see EUROPE 12711/8).
See the joint statement: https://bit.ly/3pxdSDb (Original version in French by Marion Fontana)