Corporate due diligence rules agreed to safeguard human rights and environment
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Applies to EU and non-EU companies with a turnover over 150 million euro and smaller companies in sectors such as manufacture of textiles, agriculture, mineral resources and construction
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A civil liability regime for damages
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Penalties include naming and shaming and fines of up to no less than 5% of net worldwide turnover
Parliament and Council negotiators agreed on new rules obliging firms to integrate their human rights and environmental impact into their management systems.
The new directive on corporate sustainability due diligence, informally agreed by EU co-legislators on Thursday, sets obligations for companies to mitigate their negative impact on human rights and the environment such as child labour, slavery, labour exploitation, pollution, deforestation, excessive water consumption or damage to ecosystems .
They will have to integrate so called “due diligence” into their policies and risk-management systems, including descriptions of their approach, processes and code of conduct. Firms, including financial sector, will also have to adopt a plan ensuring their business model complies with limiting global warming to 1.5°C. MEPs ensured that the management of companies with over 1000 employees will receive financial benefits for implementing the plan.