25th May 2022
Insurance Europe has published its response to a consultation conducted by the European Commission(EC) on its proposal for a Corporate Sustainability Due Diligence(CSDD) Directive.
Economic activities must avoid causing or contributing towards adverse impacts on human rights and the environment. Furthermore, the industry welcomes corporate decisions that duly take account of a broad spectrum of considerations relevant to both companies’ impact on people and the planet, as well as on long-term financial performance.
The EC proposal for a CSDD Directive is intended to accelerate and deepen the corporate sustainability actions and transition planning already being undertaken by many companies, and the insurance industry supports this objective.
In this respect, the insurance sector welcomes the fact that the Directive sets out a harmonised framework on corporate due diligence requirements. This will ensure a regulatory level playing field, including with non-EU companies which are also covered by the Directive, and prevent divergences between member states.
The insurance sector would, however, like to bring to the attention of legislators the following key elements:
-Consistency and alignment with other EU legislations is essential to avoid a fragmented framework regarding due diligence which could lead to real difficulties in the practical implementation of the Directive. It must be made explicit in the Directive that specific sectoral obligations should prevail.
-Due diligence requirements should apply at consolidated level only.
-The definition of value chain needs to be reviewed to fully reflect the insurance sector’s specificities and limited to established direct business partners.
-Civil liability rules should not be included in the Directive. If Article 22 is retained, it is essential that due diligence requirements are appropriate, clear, proportionate, achievable.
-Further clarity is needed in terms of supervision.
-The 500+ headcount criterion of the proposed directive is too low and should be better aligned with national legislation.
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