[vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none”][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_direction_desktop=”default” column_element_spacing=”default” desktop_text_alignment=”default” tablet_text_alignment=”default” phone_text_alignment=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_backdrop_filter=”none” column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1/1″ tablet_width_inherit=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text text_direction=”default”]The EU’s Sustainability Due Diligence Directive (CS3D) has been approved by the Council of the EU after two previous unsuccessful attempts. This directive, a key part of the EU’s Green Deal legislative package, will add to existing ESG-related rules such as the Corporate Sustainability Reporting Directive and the Deforestation Regulation.
Key aspects of the approved directive include:
Scope of Covered Companies: Non-EU companies with more than €450 million in EU net turnover over the past two years, and EU companies with the same turnover and over 1,000 full-time equivalent employees, must comply.
Phase-In Periods: Compliance will be phased in over three to five years depending on company size, with the earliest compliance date set for 2027.
Substantive Requirements: Companies must conduct due diligence on business partners, assess impacts of their activities, and establish governance structures.
Liability: Third-party claims for noncompliance are allowed, with penalties of up to 5% of net worldwide turnover.
Regulatory Actions and Penalties: Regulatory authorities can enforce the directive and impose fines.
Applicability to the Financial Sector: Financial institutions, including banks, will generally be subject to the directive.
The CS3D will have significant implications for covered and non-covered companies alike, affecting contractual relationships and requiring adjustments to processes and procedures for compliance.[/vc_column_text][/vc_column][/vc_row][vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none” gradient_type=”default” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_direction_desktop=”default” column_element_spacing=”default” desktop_text_alignment=”default” tablet_text_alignment=”default” phone_text_alignment=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_backdrop_filter=”none” column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1/1″ tablet_width_inherit=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text text_direction=”default”]
Source: Jones Day
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