Finance Watch co-signed today a joint letter to European Commission President Ursula von der Leyen and Vice-President Věra Jourová expressing deep concerns that reforms of directors’ duties, mandatory corporate sustainability targets and related incentives may not feature in the forthcoming proposal on Sustainable Corporate Governance.
In this letter, we urge the Commission to ensure the two following key recommendations are integrated in its proposal:
- Clarify existing directors’ obligations with regards to strategic oversight of sustainability matters and related due diligence obligations. Those must form an integral part of companies’ strategy. This undoubtedly requires measurable, specific and time-bound science-based targets – accompanied by transition plans, to ensure alignment with EU’s international commitments on climate change in particular.
- Aligning incentives for actions with sustainability targets: Sustainability is emerging as a challenge and an opportunity for companies. The remuneration of those who guide and steer their direction must be designed to support this transition. This has been supported by 25 CEOs of leading European companies, investors and business associations in a recent letter.