Europe remains committed to gradually improving the sustainability of the fabric of production so that it is not incompatible with public welfare and the environment. The European Parliament (EP) reached an agreement on Thursday. Obligation of large companies operating in the European Union to monitor and mitigate the negative effects of their activities on the environment or human rightsFailure to comply will be punished with fines.
The resolution, which was approved by 366 votes in favour, 225 against and 38 abstentions, was signed by the European Parliament with the Council (Member States) and the European Commission. Due Diligence Directive Percentage of companies in terms of sustainability presented by Community Manager in February 2022.
The legislation requires companies to monitor, prevent and prevent child labour, labor exploitation, pollution or environmental degradation. reduce not only their own impacts, but also those caused by value chain partners such as suppliers, responsible for sales, distribution, transportation or waste management, among others.
MPs want new rules to be implemented EU-based companies with more than 250 employees and a turnover of more than 40 million Euros, Alongside the main companies with more than 500 employees and a global turnover of 150 million Euros.
Non-European companies, of which at least 40 million are manufactured in the EU and whose turnover exceeds 150 million euros, will also be covered.
Banks too
Eurocámara begs to include: companies from all industries, including financeWhile the Member States that agreed on their positions for negotiation last December prefer the exclusion and regulation of this sector at the national level.
On the other hand, they ask. companies should develop a transition plan to limit global warming to 1.5 degrees Celsius In those with more than 1,000 employees, it is seen that compliance with the plan has an effect on executive remuneration.
Companies they would also need to bring in a mechanism to file a complaint and to provide investors with information on the sustainability due diligence policy, publishing it in the Single European Access Point (ESAP), a common database newly adopted by the EU, which should be launched in 2026.
Fines of up to 5% of your global bill
The European Parliament is committed Companies that do not comply with the rules are penalized by national auditors with a fine of at least 5% of their total turnover, Non-EU companies violating the rules will be excluded from EU public procurement.
The rules would begin to apply three or four years after they went into effect, depending on the size of the company. by 2028 at the earliest.
Business Europe, the European employers’ association, was close to this. The rules proposed by the European Parliament are not “enforceable” and are “too prescriptive, utterly punitive in nature”.It called for these issues to be addressed during negotiations with the Council, which does not distinguish between procedural errors and actual harm, so as to ensure proportional implementation or avoid “unnecessary interference in the management of business”.
On the contrary, both the environmental organization WWF and human rights advocacy Amnesty International welcomed the European Parliament’s proposal, although they felt there was room for improvement.
WWF welcomed the inclusion of the financial sector, but noted that there were inconsistencies as they did not see the financing companies as part of their value chain.Expanding the definition of environmental damage was appreciated, although categories such as loss of biodiversity and biodiversity were excluded.
On behalf of Amnesty International, The European Parliament “sent a clear signal that it plans to promote access to justice. For victims of human rights violations by companies”, but regretted that this would be more difficult in the case of the financial sector, and asked for it to be corrected during negotiations.
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