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A group of 31 legal scholars from various European universities on Friday criticized the European Union (EU)’s proposal to reform corporate sustainability regulations, known as the Omnibus Simplification Package. The signatories expressed concerns that the proposed reform would undermine the clarity of the European corporate sustainability rules and lead to an increase in climate-related lawsuits against companies.
In a letter, the legal scholars stated that the amendments proposed in the Omnibus package would significantly weaken existing corporate sustainability due diligence rules established under the Corporate Sustainability Due Diligence Directive (CSDDD). Their criticism primarily focused on the modification of Article 22 of the CSDD, which requires large companies to adopt and implement a “transition plan for climate change mitigation” detailing how they will reduce their greenhouse gas emissions (GHG).
The main concern raised by the signatories was that the Omnibus package relaxes large companies’ obligation to adopt and implement a climate transition plan by changing the requirement to simply “adopt a transition plan,” thereby eliminating the legal obligation to put that plan into action. As a result, the proposal requires companies merely to submit documentation of their climate plan, rather than incentivizing them to take meaningful action as originally intended by the CSDD.
Furthermore, the signatories highlighted that the proposed amendment would not facilitate business operations and would instead increase the risk of climate-related litigations. The removal of the obligation to implement a climate transition plan would hinder efforts to meet the Paris Agreement‘s goal of keeping global warming below 1.5 degrees Celsius, which contradicts the commitments of European states and exposes them to further lawsuits while undermining legal certainty for businesses.
Additionally, the legal scholars pointed to the growing number of pending climate-related lawsuits against corporations before European courts to note that loosening corporate climate obligations would exacerbate the lack of a clear regulatory framework. In the long run, this could lead to increased liability risks for corporations and create regulatory gaps that national courts will need to address, ultimately fragmenting the legal framework of the internal market.
Moreover, the removal of the obligation to “put into effect” a climate transition plan could encourage companies to engage in greenwashing, as this obligation under the CSDD complements the transparency required by the Corporate Sustainability Reporting Directive (CSRD). Therefore, the signatories emphasized the need to retain the obligation outlined in Article 22 of the CSDD. They also recommended that this obligation be supported by providing clear implementation guidance to achieve consistent, certain, and harmonized regulations for European companies.
The Omnibus Simplification Package includes a series of amendments to European sustainability rules aimed at reducing regulatory burdens for EU businesses to enhance their competitiveness. Human rights organizations, however, opposed the proposed reform and urged the EU to reject it, arguing that it would undermine existing corporate sustainability laws designed to protect human rights and the environment.
European states have previously received calls from the UN to intensify their efforts in mitigating the effects of climate change and safeguarding citizens against extreme weather events. The latest call came in March, when the UN urged the Council of Europe to adopt a binding protocol recognizing the right to a healthy environment.
The post Legal scholars claim EU Omnibus directive undermines sustainability rules and increases corporate liability risk appeared first on JURIST - News.
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In a letter, the legal scholars stated that the amendments proposed in the Omnibus package would significantly weaken existing corporate sustainability due diligence rules established under the Corporate Sustainability Due Diligence Directive (CSDDD). Their criticism primarily focused on the modification of Article 22 of the CSDD, which requires large companies to adopt and implement a “transition plan for climate change mitigation” detailing how they will reduce their greenhouse gas emissions (GHG).
The main concern raised by the signatories was that the Omnibus package relaxes large companies’ obligation to adopt and implement a climate transition plan by changing the requirement to simply “adopt a transition plan,” thereby eliminating the legal obligation to put that plan into action. As a result, the proposal requires companies merely to submit documentation of their climate plan, rather than incentivizing them to take meaningful action as originally intended by the CSDD.
Furthermore, the signatories highlighted that the proposed amendment would not facilitate business operations and would instead increase the risk of climate-related litigations. The removal of the obligation to implement a climate transition plan would hinder efforts to meet the Paris Agreement‘s goal of keeping global warming below 1.5 degrees Celsius, which contradicts the commitments of European states and exposes them to further lawsuits while undermining legal certainty for businesses.
Additionally, the legal scholars pointed to the growing number of pending climate-related lawsuits against corporations before European courts to note that loosening corporate climate obligations would exacerbate the lack of a clear regulatory framework. In the long run, this could lead to increased liability risks for corporations and create regulatory gaps that national courts will need to address, ultimately fragmenting the legal framework of the internal market.
Moreover, the removal of the obligation to “put into effect” a climate transition plan could encourage companies to engage in greenwashing, as this obligation under the CSDD complements the transparency required by the Corporate Sustainability Reporting Directive (CSRD). Therefore, the signatories emphasized the need to retain the obligation outlined in Article 22 of the CSDD. They also recommended that this obligation be supported by providing clear implementation guidance to achieve consistent, certain, and harmonized regulations for European companies.
The Omnibus Simplification Package includes a series of amendments to European sustainability rules aimed at reducing regulatory burdens for EU businesses to enhance their competitiveness. Human rights organizations, however, opposed the proposed reform and urged the EU to reject it, arguing that it would undermine existing corporate sustainability laws designed to protect human rights and the environment.
European states have previously received calls from the UN to intensify their efforts in mitigating the effects of climate change and safeguarding citizens against extreme weather events. The latest call came in March, when the UN urged the Council of Europe to adopt a binding protocol recognizing the right to a healthy environment.
The post Legal scholars claim EU Omnibus directive undermines sustainability rules and increases corporate liability risk appeared first on JURIST - News.
Continue reading...
Note: We don't have any responsibilities about this news. Its been posted here by Feed Reader and we had no controls and checking on it. And because News posted here will be deleted automatically after 21 days, threads are closed so that no one spend time to post and discuss here. You can always check the source and discuss in their site.