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Sustainability

Why responsible investors can present a competitive hedge with the adoption of CSDDD

  • 08 July 2024 (10 min read)
KEY POINTS
The Corporate Sustainability Due Diligence Directive marks the next stage in the evolution of European corporate due diligence
Companies are liable in the event of due-diligence failure, with significant financial fines – up to 5% of their annual turnover
Companies have an obligation of means to respect human rights and the environment – and to have a climate transition plan
This regulation will impact certain supply chains and modify business relationships between ordering companies and suppliers
Investors should consider the potential financial risks for their investee companies and define policies and have measures in place

On 23 February 2022, the European Commission submitted to the European Parliament and Council a proposal for a directive on Corporate Sustainability Due Diligence. Following much debate, discussion and delayed votes, the directive went live in May 2024 - notable prior to June's European Parliament elections, the outcome of which could have endangered the directive's adoption.

The directive, as laid out by the European Council, “introduces obligations for large companies regarding adverse impacts of their activities on human rights and environmental protection”.1

We believe the final text represents an important step for human rights and the environment.

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    Disclaimer
    This document is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities. It has been established on the basis of data, projections, forecasts, anticipations and hypothesis which are subjective. Its analysis and conclusions are the expression of an opinion, based on available data at a specific date. All information in this document is established on data made public by official providers of economic and market statistics. AXA Investment Managers disclaims any and all liability relating to a decision based on or for reliance on this document. All exhibits included in this document, unless stated otherwise, are as of the publication date of this document. Furthermore, due to the subjective nature of these opinions and analysis, these data, projections, forecasts, anticipations, hypothesis, etc. are not necessary used or followed by AXA IM’s portfolio management teams or its affiliates, who may act based on their own opinions. Any reproduction of this information, in whole or in part is, unless otherwise authorised by AXA IM, prohibited.
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