EFFECTIVE EU CORPORATE ACCOUNTABILITY LEGISLATION URGED BY COMPANIES AND INVESTORS
In February 2022, a joint statement was released by more than 100 large and small companies, investors and business associations calling the European Commission to adopt a legislative proposal on mandatory human rights and environmental due diligence (mHREDD). The statement underlined the concerns raised by the delay of the publication of the EU proposal for a mHREDD legislation and outlined some characteristics that should be included in the mentioned legislation, in order to make it effective, such as: the alignment of the legislation with the UNGPs to cover all businesses operating in the EU; due diligence obligations across the whole supply chain; requirements that go beyond tick boxing and credible accountability mechanisms.
The Paper Promises report examined statements submitted by 102 companies to the Australian Government’s Modern Slavery Register and evaluated the implementation of effective measures to address modern slavery. The document reveals that companies are failing to comply with the mandatory reporting requirements, since “Most companies reviewed demonstrate superficial and incomplete compliance with the reporting requirements of the MSA”. Apart from this, obvious modern slavery risks are not being identified or disclosed and “Less than a third of companies reviewed (27%) could demonstrate that they are taking some form of action against modern slavery risk”.
EUROPEAN COMMISSION’S COMPLEMENTARY CLIMATE DELEGATED ACT LABELS GAS AND NUCLEAR ENERGY AS SUSTAINABLE
On the 2nd of February the Commission adopted the final Complementary Climate Delegated Act which follows the EU Sustainable Taxonomy, a comprehensive guide for private investors to invest responsibly in the context of achieving climate neutrality and a result of the EU Action Plan on Sustainable Finance. The Delegated Act, which is now subject to a period of 4-to-6 months scrutiny by the European Council and the European Parliament, includes for the first-time fossil gas and nuclear energy into the EU Taxonomy and labels them as sustainable investments. The proposal has been received with opposition from different stakeholders , including the EU Platform on Sustainable Finance, an expert advisory panel of the European Commission tasked with researching on sustainable policies in relation to finance, and Austria and Luxembourg have threaten legal action against the commissions act.
The Tony’s Chocolonely published their annual report for 2020-2021 and reported 1,701 cases of child labor. According with the document, the huge increase between the 387 cases found in 2019/2020 and the present numbers are due to the onboarding of two cooperatives where 1,426 cases were detected. Beside this significant numbers, the company concluded the following – “We’ve learned that the longer we work with a cooperative (which always involves implementing Tony’s 5 Sourcing Principles and rolling out the CLMRS) the lower the prevalence of child labor”.
THE CLIMATE CORPORATE ACCOUNTABILITY ACT WAS PASSED IN THE CALIFORNIA SENATE
The California Senate passed into law the Climate Corporate Accountability Act, that becomes the first US legislation requiring large companies to disclose greenhouse gas emissions. The new law obliges companies operating in California and with more than $1 billion in gross annual revenue to disclose annually on their emissions, including direct emissions, emissions from purchase and use of electricity and indirect emissions (including the ones from the supply chain). It is expected that the legislation will apply to most of US largest corporations. The bill still needs to pass the Assembly and only then can the Governor potentially pass it into law.