Global Witness welcomes today’s vote on the Sustainable Finance own initiative report in the European Parliament’s Economic and Monetary Affairs Committee.
With this vote, members of the European Parliament (MEPs) have sent a clear message to the European Commission that mandatory due diligence must be part of the EU’s action on global sustainability challenges.
MEPs voted to call on the EU to make institutional investors much more accountable for the impacts of their investment decisions both within Europe and the Global South. The report explicitly calls for financiers to carry out mandatory due diligence on their investments and endorses a broad approach to Environmental, Social and Governance (ESG) risks beyond climate change, to include human rights issues and land grabbing.
For decades investors have turned a blind eye to wide spread land grabbing, human rights abuses and deforestation in the developing world without reprieve.
There is growing evidence that European investors have been complicit in the practice of land grabs, driving people from their land, creating human rights violations and forcing millions into poverty and instability.
Global Witness has investigated several cases, such as Rubber Barons and The New Snake Oil, which lay bare how EU investors were backing land grabs with devastating consequences for people and the planet.
Today’s vote should make citizens proud of their Members of the European Parliament as defenders of human rights around the world. Mandatory due diligence provides the missing link to stop EU finance leading to human rights harm and environmental degradation for millions of people in the developing world, enabling sustainable development to take root in the poorest countries in Africa, Asia and Latin America and for the world to meet the Paris commitments. - Rachel Owens, Global Witness Head of EU Advocacy
MEPs supported the Commission's Action Plan on Financing Sustainable Growth and called for further action to ensure the initial steps on green finance are followed by broader sustainable finance initiatives. This should be included in the Commission's forthcoming legislative proposals due at the end of May.
Global Witness is now calling on all Members of the European Parliament to back today’s historic vote in Plenary, and advocating for the European Commission to introduce binding legislation to mitigate against all unsustainable finance impacts including deforestation, global warming and land use change as part of its commitments towards the UN Sustainable Development Goals.
UPDATE: On Wednesday 23rd May at 10:30 AM, Global Witness, ShareAction and WWF will be holding a press conference on Regulating risk: Why a sustainable Europe begins with clean investments.
With EU legislative proposals on sustainable finance due the
same week, NGOs Global Witness, Share Action and WWF will answer questions on
what's expected, and why laws must urgently be put in place to curb the
excesses of deregulation, extensive financial intermediation and lack of
accountability to end-investors, in order to ensure our money is used
to help protect the environment, curb climate change and protect communities
For more details please contact: Aleksandra Terzieva.
Rachel OwensHead of EU Office and EU Advocacy / Directrice du Bureau (UE). Campaign Lead on Corporate Accountability
Heather IqbalSenior Communications Advisor
Notes to editor:
The Own Initiative report (INI) voted through the Economic and Monetary Affairs (ECON) committee today calls for the European Commission to develop a "mandatory due diligence framework, based on the 2017 OECD Guidelines for Responsible Business Conduct for Institutional Investors, requiring investors to identify, prevent, mitigate and account for ESG factors”.
In Action 10 of the European Commission’s Action
Plan on Financing Sustainable Growth published on 8 March 2018, the European
Commission announces "analytical and consultative work with relevant
stakeholders to assess (i) the possible need to require corporate boards to
develop and disclose a sustainability strategy, including appropriate due diligence
throughout the supply chain, and measurable sustainability targets".
Global Witness has offered its expertise to the European Commission.
In Action 1 of the Action Plan, the Commission announces the set-up of a "Technical expert group on sustainable finance", initially tasked with developing an "EU taxonomy or classification system of climate change mitigation, climate change adaptation and other environmental activities". The Action Plan mentions that "as a second step, the taxonomy will cover remaining environmental and social activities, recognising that one aspect of sustainability must not be detrimental to other related risks or objectives". The group is expected to begin its activities at the end of May 2018.
More information is available here:
You might also like
Conflict Minerals in EuropeAfter years of campaigning by Global Witness and civil society partners the EU has reached a political understanding on a new law intended to break the links between the minerals trade, conflict and human rights abuses.
How to stop European money fuelling land grabbing overseasA worrying number of land grabs in developing countries involve European companies or are backed by European money
How can Europe help stop the deadly trade in conflict timber?European companies continue to shirk responsibility for bankrolling conflict in forest-rich countries