EU States Offer Exemption for Financial Services from 'Due Diligence' Rules

European Union member states on Thursday reached a deal on rules that would force large companies to check whether their suppliers use slave or child labour, or pollute the environment, but with an optional exemption for financial services, Reuters reported. Known as corporate sustainability due diligence, the rules were proposed by the European Commission earlier this year and would be applied to around 13,000 large companies, requiring them not just to identify impacts but also take measures to mitigate or end them. It is part of a package of EU "green deal" measures that includes separate sustainability disclosure requirements on companies as well as the financial sector, and on asset managers. "This is a very fragile compromise but we believe we have managed to strike the right balance," said Jozef Sikela, minister for industry and trade for the Czech Republic, which holds the EU presidency and chaired Thursday's meeting of EU industry ministers. "This is the highest common denominator which makes everyone equally unhappy," Sikela said. "I can conclude we have reached a general approach on this directive. The council proved its determination on such a landmark piece of legislation." Following efforts by France and other countries, the compromise allows EU states to exclude financial services companies within their national borders. Read more.