Sustainability Due Diligence and EU Regulatory Framework

This document is a technical report that discusses the importance of a harmonized EU framework for sustainability due diligence. It outlines the current landscape of sustainability due diligence legislation across various jurisdictions, highlighting the risks associated with regulatory fragmentation. The report emphasizes the need for a consistent approach to due diligence that aligns with existing international standards, particularly in the financial sector. It details the responsibilities of financial institutions in assessing environmental and social risks, and the necessity for clear definitions and boundaries regarding the value chain. The report advocates for a risk-based approach to due diligence, allowing companies to prioritize significant risks effectively. Additionally, it stresses the importance of an open dialogue between public and private sectors to shape a mature regulatory framework that avoids shifting undue legal liability to companies. The report concludes with recommendations for EU policymakers to create a robust and impactful due diligence regime.