Finance Watch reacts to European Parliament JURI committee vote on CSDDD

On 25 April 2023, the European Parliament’s Committee on Legal Affairs (JURI) approved its position on the corporate sustainability due diligence directive (CSDDD) to push companies to integrate environmental and social considerations in their business model, operations and value chain.  Finance Watch welcomes requirements for companies to adopt climate transition plans, but is concerned by the lack of ambition on the scope of due diligence requirements for financial institutions and calls for more specific guidance on this.

The CSDDD is built on two key elements. Firstly, it introduces a requirement to create transition plans for companies to align their business model and strategy with the limiting of global warming to 1.5 °C in line with the Paris Agreement. Secondly, it requires companies in scope to conduct due diligence on their entire value chain to identify, prioritise and prevent potential or actual adverse impacts on human rights and environmental matters, as well as to monitor and remediate them. However, the current definition of value chain for financial services remains limited and will require clarification in the sector-specific guidance to adequately cover the risks of adverse impact within the value chain, including for client’s contractors, in a meaningful and risk-based manner.

Finance Watch, the pan-European NGO advocating to make finance serve society, welcomes that the JURI committee agreed to include financial undertakings in scope to adopt and implement transition plans. This resolves the legal uncertainty as to whether Corporate Sustainability Reporting Directive (CSRD) reporting rules create the obligation to have such plans. Nevertheless, more ambition and clarity on the due diligence aspects are still needed. The current definition of value chain for financial services only covers “the activities of clients directly receiving financial services” and leaves room for interpretation.. Yet Finance Watch welcomes the inclusion of measures for institutional investors and asset managers to induce their investee companies to bring actual adverse impacts to an end, despite the fact that investment activities are not covered by the definition of the value chain.

Vincent Vandeloise, Senior Research and Advocacy Officer at Finance Watch, said:

“The JURI committee’s compromise is more ambitious than the Council position, notably on transition plans and the alignment of directors’ remuneration with such plans. However, there is a risk that we exempt financial services from effective due diligence. Recent scandals in the chemical and construction industries have shown that human rights and environmental crimes are not only the fact of a shadow and illegal economy, but large EU companies and their contractors are also exposed. Adequate sector specific guidance for the value chain of financial services will be needed as such due diligence is also a matter of protecting companies’ reputation and financial performance.”

The text will now need to be approved by the European Parliament in plenary session before the interinstitutional negotiations can start. Finance Watch calls on EU policymakers to strengthen due diligence rules for financial institutions in the next steps of the legislative process and maintain the requirement for implementing climate transition plans.

To arrange an interview with Vincent Vandeloise, Senior Research and Advocacy Officer at Finance Watch, please contact Alison Burns at or call on +32 (0)471577233

About Finance Watch

Finance Watch is an independently funded public interest association dedicated to making finance work for the good of society. Its mission is to strengthen the voice of society in the reform of financial regulation by conducting advocacy and presenting public interest arguments to lawmakers and the public. Finance Watch’s members include consumer groups, housing associations, trade unions, NGOs, financial experts, academics and other civil society groups that collectively represent a large number of European citizens. Finance Watch’s founding principles state that finance is essential for society in bringing capital to productive use in a transparent and sustainable manner, but that the legitimate pursuit of private interests by the financial industry should not be conducted to the detriment of society.


For press enquiries or to receive our press releases via email, please contact:

Go to All press