EU Regulations Thematic Investor Group

Through its Green Deal, the European Union has committed to being a frontrunner in transitioning the EU economy to a more sustainable model, including sustainable business and financial activities. Along with our investor members and our allies, the Investor Alliance actively follows developments in the EU regulatory space. 

An important recent regulatory development is efforts to mandate human rights and environmental due diligence (HREDD) via the Corporate Sustainability Due Diligence Directive, which is currently under ongoing negotiations. If mandated HREDD is robust and in line with international frameworks like the UN Guiding Principles on Business and Human Rights (UNGPs), it will require companies and investors to assess and address the adverse impacts of their activities and hold them to account if they fail to act, as well as ensuring access to remedy for affected people. 

Improved transparency and reporting are necessary for investors to assess responsible business conduct by their portfolio companies. 

The Investor Alliance has released a number of investor statements calling for robust mandated HREDD. For example, on November 24, 2022, the Investor Alliance for Human Rights, the Principles for Responsible Investment, Eurosif, and 142 signatories with approximately 1.5T in AUM issued a public statement welcoming the proposal and asking for improvements to ensure that the CSDD will be an ambitious and effective directive, to include inclusion of financial companies, coverage of the entire value chain and clear obligations for directors. An earlier statement supported by 44 investors and companies called for provisions on meaningful and safe stakeholder engagement. 

If you are interested in learning more about our work or would like to be added to the outreach list for this Thematic Investor Group, please get in touch with Rebecca DeWinter-Schmitt.