Mirova

Mirova calls on EU Commission to preserve integrity and ambition of the CSDDD

"we call on the European Commission to preserve the integrity and ambition of the EU’s sustainable finance framework, in response to current discussions on “omnibus legislation” to amend key regulations."

The company agrees that an EU legal framework is needed for supply chain due diligence to address adverse impacts on human rights. It agrees with the definition of due diligence duty provided by the consultation and advocates for a minimum process and definitions approach.

The Company agrees that an EU legal framework is needed for supply chain due diligence to address adverse impacts on human rights (question 2). It agrees with the definition of due diligence duty provided by the consultation. It states that, 'we agree because we believe that a company's responsibility is to be understood on its entire supply-chain, although the level (1, 2 or 3) of suppliers and subcontractors should be more precisely specified to understand the limits of the company's responsibility.' Finally, it advocates for a minimum process and definitions approach.

The signatories support simplification, however, they do not support reopening the legislative files. They suggest instead to address issues of simplification through level 2 legislative acts.

"Businesses and financial market participants need long-term policy stability to support their implementation efforts. Recent studies, including those published by the EU’s own Platform for Sustainable Finance, are showing that increased transparency created by these regulations is starting to have an impact. ... Initiatives like the Clean Industrial Deal will ensure the long-term competitiveness of Europe's net-zero industry and its economic resilience. ... The CSDDD complements these disclosure tools with essential opportunities for action and behavioral change. ... We support the overall objective of simplifying and improving the coherence of the EU sustainable finance framework. Such revisions can effectively reduce reporting burdens and complexity, while enhancing the usefulness of disclosure requirements and promoting a more coherent approach to the transition across the value chain. However, reopening these regulations in their entirety risks creating regulatory uncertainty and could ultimately jeopardise the Commission’s goal to reorient capital in support of the European Green Deal. ... We therefore support targeted actions by the Commission at the technical level to provide simplification, clarity and consistency across the framework."

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 entity considers that SMEs should be excluded with some exceptions, and considers that due diligence duty should follow a minimum process and definitions approach applicable to sensitive sectors.

In response to the question on how the burden on companies, particularly smaller ones, could be reduced (question 16), it picks different options, including the exclusion of SMEs with some exceptions (e.g. most risky sectors or other), and having lighter reporting requirements for them. It also advocates for a minimum process and definitions approach to due diligence duty, but clarifies that: 'the horizontal approach of minimum processes and definitions should be implemented for human rights for sensitive sectors (such as textile, IT...) and climate-related issues for almost all sectors in order to limit EU importation of carbon.'

The Company advocates for judicial enforcement with liability and compensation in case of harm caused by not fulfilling the due diligence obligations.

The Company advocates for judicial enforcement with liability and compensation in case of harm caused by not fulfilling the due diligence obligations.

The Company strongly agrees that corporate directors should be required by law to manage the risks in relation to stakeholders and set up procedures, and, where relevant, targets, to identify, prevent and address human rights risks in relation to stakeholders.

The Company strongly agrees that corporate directors should be required by law to manage the risks in relation to stakeholders (question 6) and set up procedures, and, where relevant, targets, to identify, prevent and address human rights risks in relation to stakeholders. (question 7)

Although it does not explicitly refer to impact remediation, it picks as an enforcement mechanism judicial enforcement with liability and compensation in case of harm caused by not fulfilling the due diligence obligations.

Although it does not explicitly refer to impact remediation, it picks as an enforcement mechanism judicial enforcement with liability and compensation in case of harm caused by not fulfilling the due diligence obligations. (question 19a)

Although this is not directly asked, the Company agrees with the definition of due diligence duty, which includes accounting for human rights in the supply chains linked to the Company and is in favour of judicial enforcement with liability and compensation in case of harm caused by not fulfilling the due diligence obligations.

Although this not directly asked, the Company agrees with the definition of due diligence duty, which includes accounting for human rights in the supply chains linked to the Company (question 14) and is in favour of judicial enforcement with liability and compensation in case of harm caused by not fulfilling the due diligence obligations (question 19a).

Although the company strongly agrees that directors should be required to establish mechanisms for engaging with stakeholders as part of their due diligence duty, it is unclear whether it supports the inclusion of grievance mechanisms within due diligence, as it believes these should not be promoted at the EU level but rather considered a best practice.

Although the company strongly agrees that directors should be required to establish mechanisms for engaging with stakeholders as part of their due diligence duty (question 20a), it is unclear whether it supports the inclusion of grievance mechanisms within due diligence, as it believes these should not be promoted at the EU level but rather considered a best practice (question 20c).

The Company picks as an enforcement mechanism judicial enforcement with liability and compensation in case of harm caused by not fulfilling the due diligence obligations.

The Company picks as an enforcement mechanism judicial enforcement with liability and compensation in case of harm caused by not fulfilling the due diligence obligations (question 19a).

The company agrees with the definition of due diligence duty, and advocates for a: 'minimum process and definitions approach in terms of content for the due diligence duty.' Although it does not explicitly refers to remediation, it advocates for: 'judicial enforcement with liability and compensation in case of harm caused by not fulfilling the due diligence obligations'.

The company agrees with the definition of due diligence duty presented in the consultation stating that: 'we agree, because we believe that company's responsibility is to be understood on its entire supply-chain, although the level (1, 2 or 3) of suppliers and subcontractors should be more precisely specified to understand the limits of the company's responsibility.' In relation to due diligence duty content, it advocates for a minimum process and definitions approach. Finally, although it does not explicitly refer to remediation, it advocates for judicial enforcement with liability and compensation in case of harm caused by not fulfilling the due diligence obligations.

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'.

The Company strongly agrees with the requirement for companies to identify stakeholders and their interests, including communities affected by both operations and supply chains.

The Company strongly agrees to requirement for companies to identify stakeholders and their interests (question 6), including communities affected by both operations and supply chain. (question 5, relevancy of different stakeholder groups).

The entity strongly agrees that the EU should require companies to establish consultation channels for engaging with stakeholders.

The entity strongly agrees that the EU should require companies to establish consultation channels for engaging with stakeholders (question 20a). It does not elaborate further.

The company strongly agrees that directors should be required by law to manage risks for the company in relation to stakeholders and their interests.

The company strongly agrees that directors should be required by law to manage risks for the company in relation to stakeholders and their interests (question 6).