Allianz SE

Although the Company shares some concerns regarding the content of the proposal, it supports the Directive and sees it as a fundamental key to ensure sustainability at EU level.

The Company states that’ Allianz highly appreciates the European Commission’s proposal for a Directive on corporate sustainability due diligence (CSDDD) with its aim to foster sustainable and responsible corporate behaviour and to anchor human rights and environmental considerations in companies’ operations and corporate governance. Indeed, we deem the CSDDD as a key cornerstone of the overall EU sustainability policy framework that should be subject to an ambitious timeline, also due to the interlinkage with the CSRD. However, some ambiguities and inconsistencies need to be solved and addressed to foster a successful implementation of the envisaged rules and to ensure the achievement of the objectives’. It then discloses its concers and suggesetions in alignement with reporting duties contained in CSRD, scope, value chain scope, and legal liability requirements.

The statement calls for preserving the core of the EU sustainable finance framework, including corporate due diligence, considering that regulatory simplification can be achieved without compromising the substance of the new rules.

Signatories ‘are issuing this joint statement to emphasise the importance of preserving the core of the EU sustainable finance framework. Rules on … corporate due diligence are a key foundation for achieving the EU’s economic and sustainability goals. … In the context of the Omnibus I simplification initiative, we call attention to the investors, banks, other financial institutions and companies across our economy that support preserving the core elements of the … Corporate Sustainability Due Diligence Directive (CSDDD). … CSRD/ESRS and CSDDD are essential for achieving the EU’s wider sustainability, growth and competitiveness ambitions. … The signatories of this statement consider that regulatory simplification can be achieved without compromising on the substance of sustainability rules or their significant benefits for businesses across the EU’.

The Company seems to support the exclusion of SMEs

Although the entity does not directly indicate that it supports this exclusion, it states the following: 'While we generally understand the arguments broughtforward by the EU COM for excluding SMEs from the personal scope of the CSDDD, this raises concerns for CSRD companies. In case this difference in scope is maintained, it is imperative that the implications thereof are taken due account of and are adequately reflected in the CSRD resp. CSDDD, as relevant. E.g., the CSRD requirements must be designed in a way that any disclosure requirements on the undertaken and mandated due diligence process as per the CSDDD cannot cover partners that do not have respective duties'.

The Company considers that provide supports for SMEs, which are excluded, can cause liability risks

The Company states that 'The mere obligation of addressed companies to provide “proportionate” support for SMEs, not within the scope of the Directive, causes huge liability risks as this obligation cannot be defined, specified and limited sufficiently. It has to be made clear that a CSDD liability may only arise in case of infringements caused by the company itself'.

The Company supports liability only regarding infringements directly caused by the Company itself.

The Company states that 'The introduction of a vague liability fosters legal uncertainty. It exposes companies concerned and their liability insurers to incalculable risks by encouraging claimants, to file civil actions against the companies. … It has to be made clear that a CSDD liability may only arise in case of infringements caused by the company itself. Clarification is needed,that the attribution of liability follows the principles of causation and attaches to the company only if the infringement was the ultimate cause and has a certain materiality'.

The Company is in favour of limiting value chain to direct clients.

The Company states that 'We understand and support that Art. 3 (g), when defining the value chain for financial institutions, focuses on the client of a (re)insurance company, i.e. the policyholder or reinsured, resp. the corporate investor in case of an asset manager - the word “direct” needs to be inserted before the word ‘client’. We would advise a risk-focused view on sustainable and responsible behaviour, whereby size and nature of the policyholder/ investor is considered. Since insurance contracts for large corporate clients usually generically cover all of the policyholder’s subsidiaries in and outside the EU whose activities are therefore ‘linked to the contract in question’ - even if the relative size of their risk is only small - the respective reference in Art. 3(g) should be deleted'.

The statement calls for not limiting due diligence to tier-1 suppliers.

It states that 'the most salient ... risks and impacts often lie deeper in supply chains. A risk-based approach to due diligence is helpful to companies as this allows them to focus on where the real risks are, building on their knowledge of their own supply chains. By limiting due diligence to tier 1 suppliers, the Omnibus proposal may unintentionally promote the kind of “box ticking” compliance exercises that it intends to reduce'.