China: Draft Corporate Sustainability Disclosure Standards
On May 27, 2024, the Chinese Ministry of Finance began soliciting opinions on draft guidelines aimed at unifying corporate sustainability disclosures, with a view to establishing a nationwide standard by 2030, according to China’s State Council Information Office. The draft guidelines set general requirements for corporate sustainability information disclosures and apply to companies established in China that are required to disclose such information. Implementation of the basic standards will gradually extend from listed to non-listed companies and from voluntary to mandatory disclosures.
EU: Corporate Sustainability Due Diligence Directive Clears Final Hurdle
The European Parliament voted to approve the compromise text of the Corporate Sustainability Due Diligence Directive on April 24, 2024, and the Council formally adopted the directive exactly one month later. This directive will apply to companies of more than 1,000 employees with a turnover of more than €450 million, affecting activities ranging from the upstream production of goods to the downstream distribution, transport and storage of products. Companies affected by the legislation will have to implement a risk-based system to monitor, prevent or remedy human rights or environmental damages identified by the directive.
After being signed by the President of the European Parliament and the President of the Council, the directive will be published in the Official Journal of the European Union and will enter into force on the twentieth day following its publication.
Member states will have two years to implement the regulations and administrative procedures to comply with this legal text. The directive will apply to companies of different sizes according to the following timeline:
- 3 years from the directive’s entry into force for companies with more than 5,000 employees and €1,500 million turnover
- 4 years from the directive’s entry into force for companies with more than 3,000 employees and €900 million turnover
- 5 years from the directive’s entry into force for companies with more than 1,000 employees and €450 million turnover
EU: Parliament Approves Forced Labor Ban
On April 23, 2024, the European Parliament voted to approve the compromise text reached with the Council concerning the prohibition of products made with forced labor on the Union market. The text must now receive final formal approval from the Council and be published in the Official Journal of the European Union. Member states will have to start applying the new rules in three years.
EU: Parliament Approves Packaging and Packaging Waste Regulation
On April 24, 2024, the European Parliament voted to approve the compromise text agreed with the Council on the Packaging and Packaging Waste Regulation. The new rules envisage packaging reduction targets (5% by 2030, 10% by 2035 and 15% by 2040) and the prohibition of certain single-use plastic packaging types as of January 1, 2030. The Council must now formally approve the agreement before it can enter into force.