What Directors’ Duties to Include in the EU Due Diligence Law?
In a letter to European Commissioners Reynders and Breton, MEP Pascal Canfin and a group of CEOs pushed for the pursuit of tougher goals in the upcoming Sustainable Corporate Governance.
The proposal for a Sustainable Corporate Governance Directive should link the sustainability objectives to part of the variable remuneration of executive directors of all large companies. This is the suggestion made by Pascal Canfin, Member of the Renew Europe Group at the European Parliament, and several CEOs in a letter to the European Commissioner for Internal Market Thierry Breton, and the European Commissioner for Justice and Consumers Didier Reynders.
Canfin and the other signatories remarked how this measure was already advocated in the study conducted by Ernst & Young for the European Commission that came out in 2020. The change in short-term governance tools and remuneration systems in corporations would incentivize companies to include and respect the long-term sustainability objective, and to actively contribute to the European Green Deal.
The European Commission is expected to publish the Sustainable Corporate Governance Directive on the 23rd of February.
