Key ESG Developments – June 2022
The European Parliament adopted recommendations to ban products made with forced labour
In an effort to prevent the trade of forced labour products, the European Parliament adopted a resolution on a new trade instrument to ban the import and export of goods made with or transported by forced labour. The resolution stresses that the new legal instrument should allow for the ban of products from a particular site of production, importer or company, vessel or fleet, as well as a specific region in case of state-sponsored slavery.
The European Parliament and EU governments reached a provisional agreement on new reporting rules for large companies
The EU Council and the European Parliament have reached an agreement on the rules of the Corporate Sustainability Reporting Directive (CSRD). The new rules are intended to amend the Non-Financial Reporting Directive – Directive 2014/95/EU.
The proposal aims to introduce more comprehensive reporting requirements and will require companies to be independently audited in what regards their sustainability requirements. Companies will be required to report on various issues, covering environmental, social and governance issues.
The proposal requirements cover listed companies, large companies and small and medium enterprises, extending the reporting requirements to non-European companies that generate over €150 million in the EU.
The Uyghur Forced Labor Prevention Act entered into force
On June 21, 2022, The Uyghur Forced Labor Prevention Act (UFLPA), which had been overwhelmingly adopted by the US Congress in December 2021, entered into force. The law intends to strengthen the already existing prohibition against the importation of products made or partially made with forced labor from China into the US.
The UFLPA establishes a rebuttable presumption that all goods from the Uyghur Region, or produced by certain entities, are made with forced labor. This means that the importer of such goods has the burden of proving, with clear and convincing evidence, that there was no forced labor in any of the production steps of the product.
Authors: Ana Carina Duarte, Rafaela Oliveira and Mariana Ferreira