Businesses support sustainability, but flexibility is needed

Recently, the European Parliament adopted two own initiative reports, one of them focused on sustainable corporate governance and the other one on corporate due diligence. The European Commission plans to publish a proposal that would merge ideas from both reports.

However, from the perspective of businesses, this is not the way ahead and there is a significant risk of overburdening companies. Businesses fully support efforts to increase sustainability and companies themselves prove that the idea of sustainable corporate governance is strongly anchored in their strategies. More importantly, the efforts in this area are voluntary and tailor-made to the needs of individual companies.

Therefore, business organizations support a solution that would create appropriate, proportionate and workable tools that would take into account the needs of EU businesses. While businesses share the objectives of the sustainable corporate governance agenda, they do not agree with the idea of the European Commission to present both sustainable governance and due diligence obligations into one proposal. It is true that both topics share certain common elements; however, they are not interchangeable and each of them needs a specific legislative approach.

The indication that the proposal of the European Commission does not intend to go in the right direction is the recent negative opinion given by the Regulatory Scrutiny Board that will oblige the Commission to considerably redraft the proposal. Business therefore call on the European Commission to present a proposal that would clearly distinguish the two topics and to apply an evolutionary, rather than a radical approach in this area.