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illuminem summarises for you the essential news of the day. Read the full piece on Green Central Banking or enjoy below:
🗞️ Driving the news: The European Commission has unveiled its "omnibus directive" to amend key EU sustainability laws, aiming to "simplify" regulations and reduce burdens on businesses
• However, critics warn that the proposed changes risk undermining years of progress in establishing strong corporate sustainability and human rights standards
• Stakeholders fear that weakening EU rules could disrupt the global momentum toward responsible business practices
🔭 The context: Since 2011, international frameworks like the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises have set expectations for corporate due diligence
• EU laws such as the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD) have been pivotal in translating these principles into binding legislation, influencing regulations worldwide, including in China and Southeast Asia
🌍 Why it matters for the planet: Diluting EU standards could lower the global baseline for sustainability practices, jeopardizing progress towards transparent, accountable supply chains and corporate impact management
• It risks creating fragmented due diligence systems, complicating investor assessments, and undermining efforts to manage systemic environmental and human rights risks globally
• Maintaining strong EU frameworks is critical for scaling sustainability norms and fostering stable, sustainable markets, particularly in emerging economies
⏭️ What's next: The European Parliament and Member States will deliberate on the omnibus directive’s proposals in the coming months, with potential amendments and negotiations expected through late 2025
• Businesses, investors, and civil society groups are likely to lobby intensively to preserve the original ambition of the CSDDD and CSRD
• The outcome could either reinforce or weaken global convergence on sustainability standards, impacting investment flows, supply chain practices, and regulatory developments worldwide
💬 One quote: “Rolling back hard-won standards risks shattering the international framework for responsible business conduct,” Richard Gardiner, author of the article.
📈 One stat: Asian companies are now performing on par with their European counterparts in adopting impact reporting measures, underscoring the global influence of EU sustainability legislation
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