"Historic vote" in EU Parliament calls for stronger due diligence regime for investors
On 5 November 2018, the European Parliament voted to adopt a stronger due diligence regime, and a more robust framework to define sustainability risks when it comes to investments. Groups including NGO Global Witness have called the vote a "historic vote" and say it could pave the way for a more ethical system of financial investment across the EU. They have also called on EU Member States to support the Parliament's initiative as part of the EU's Sustainable Finance Action Plan.
Note: A recent briefing released by Global Witness alleged that EU-based investors are regularly involved in funding projects linked to human rights abuses. For our coverage of the Global Witness briefing, including company responses see here. For our coverage of the EU Sustainable Finance Action Plan see here.
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Commentary: Global Witness calls on EU member states to support Parliament's vote for stronger investor due diligence regime
Author: Global Witness
"What the EU is doing to make our money more ethical and why you should care", 8 Nov 2018
When companies look for land to build palm oil plantations abroad, or when they want to drill for oil or minerals, they rely on investment from European banks to be able to roll out these projects. The same European banks we put our money into. So far, weak regulations have let banks and other investors turn a blind eye to where their money is going.
However, on Monday MEPs voted to ensure that these investments now have to be more transparent regarding the environmental and ethical risks they pose. Additionally, investors themselves will now have to take action to ensure that our money does not cause harm to people and planet here in Europe or around the world. This is not only relevant for bankers in suits. It’s important for all of us: these new rules prevent our money from being used to drive devastating deforestation or human rights abuses abroad...
The job is definitely not done yet — we now need to influence the 28 EU member state governments to support this initiative and ensure the financial sector is transparent and accountable...
Author: Global Witness
"HISTORIC VOTE SEES EUROPE PAVING THE WAY FOR MORE ETHICAL FINANCIAL INVESTMENT", 5 Nov 2018
[A] historic vote in the European Parliament [...] could pave the first step for a more ethical system of financial investment... This vote was led by a cross party group [...], demonstrating the EU’s commitment to sustainable investment and Parliament’s unified position...
[T]he European Parliament voted overwhelmingly to adopt a stronger due diligence regime, and a more robust framework to define sustainability risks when it comes to investments.
This means that MEPs have publicly adopted guidelines set down by the OECD on Due Diligence for Institutional Investors...
If EU Member States agree to implement this proposal, this regime will ensure that an investor or investment services provider identifies, avoids or mitigates, accounts for and communicates about actual or potential adverse Environmental, Social and Governance factors and sustainability risks.
Groups are urgently calling for the Member States to support the Parliament’s initiative, and work to strengthen this due diligence regime as part of the EU’s Sustainable Finance Action Plan.
A recent briefing, released by the anti-corruption NGO Global Witness, shows that European’s money – and EU-based investors – regularly play a key role in funding projects linked to human rights abuses...