Inaction is not an option: specific solutions to tackle sustainability gaps in corporate governance
In the face of recent opposition addressed to the EU Commission by some business associations and specific governments from Nordic Europe, NGOs have reiterated their support for the European Commission commitment to present an initiative on Sustainable Corporate Governance in 2021, following the roadmap set in the EU Green Deal and the Action Plan on Sustainable Finance.
We reaffirm the need to clarify in the upcoming law the obligations of the Board members in order to ensure that corporate governance practice is significantly more sustainable, responsible and focused on the long term (see further evidence in the letter below). This clarification can be implemented within the scope of existing company law and directors’ duties provided in the Member States’ law. It is therefore difficult to understand the frontal opposition shown to this agenda by specific governments and business associations.
Similarly, the celebration of the news of delay displays an unreasonable approach to the debate and shows a lack of commitment from certain stakeholders regarding the integration of sustainability across the EU. While the letter sent this week to Commissioner Reynders makes the business and sustainability case for EU action, the response from those criticising this initiative utilises unjustified claims of diminished competitiveness. Opposing legislation at national level to ensure EU level playing field, and then calling for international alignment is just another way to kick the ball down the road.
The EU Commission is diligently following the process of data gathering, assessment of policy options, evaluation of cost, impacts and benefits as well as processing input from public consultations. The undersigned organisations call on EU policymakers to maintain the ambition of delivering specific solutions to tackle sustainability gaps in corporate governance and urge interested parties to engage in the discussion in good faith.