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Commentary: By passing world-leading legislation, EU could establish front-runner status in sustainability & justice

'Why the EU delay on supply chains? Corporate lobbying', 19 July 2021

...The EU is a world leader in driving international cooperation for environmental and human rights protections, but EU consumption also continues to fuel the "Triple Emergency" of climate change, biodiversity loss, and poverty...

That's why the delay until the autumn of 2021 of the proposed EU law on Sustainable Corporate Governance for companies is so concerning. This legislation, which would require companies to ensure their supply chains and corporate actions are not driving human rights or environmental abuses, has been held up by intense industry lobbying...

The Commission... must lead, changing the architecture of regulation to require the private sector to meet its responsibilities and contribute actively to eradicating environmental and human rights abuses.

In order to eliminate abuses of human rights and the environment from corporate activities, it is essential to integrate risk mitigation throughout company decision making, with the direct engagement and leadership of the CEO and the Board.

Director duties and corporate strategy making should incorporate sustainable corporate governance within the wholesale transition to a circular global economy. Commissioner Thierry Breton, recently appointed to the file, should use his corporate knowledge to accelerate the shift to sustainability.

By passing world-leading legislation now to ensure transparency, liability for environmental and human rights abuses and remedy for the individuals affected, the EU can point the way to a safer, more sustainable planet, and establish frontrunner status in sustainability and justice.

This means covering the entire supply chain, including the financing underpinning it, and enshrining transparency and accountability in law. It also requires specific support for small and medium-sized enterprises to comply with the legislation.

[E]veryone wins when robust sustainable corporate governance is in place, while we all lose when we compete only on price, as we have in past decades...

The importance of getting this right cannot be overstated. This is a watershed moment to create a globally defining regulation that will help deliver the EU Green Deal; help restore biodiversity and combat global heating; benefit companies and consumers alike; and protect rights...

It's time to break the deadlock, fight environmental crimes more effectively and ensure a safer, more sustainable planet for ourselves and our children.

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