EU Forces Corporate: In a groundbreaking move, the European Union has mandated large companies to actively address child labor and environmental harm in their supply chains. Negotiations on the historic EU law concluded with an agreement between lawmakers and the council of member states. The directive, known as the Corporate Sustainability Due Diligence Directive (CSDDD), compels significant companies to identify and rectify instances of child labor or environmental damage within their supply chains. The law, expected to take effect around 2027, underwent intense discussions, particularly regarding the inclusion of financial firms.
Financial institutions secured a temporary exclusion from due diligence obligations concerning clients obtaining loans or making investments. They are only required to investigate forced labor or environmental harms within their internal operations. However, this exemption from external due diligence will be subject to review in the future.
The agreement also reinforces the responsibilities of large companies, including financial entities, to implement a transition plan with time-bound targets for climate change mitigation. This move aims to supersede existing voluntary net-zero commitments and accelerate the financial sector’s alignment with the Paris Agreement. Director remuneration will be tied to the effective implementation of these plans.
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The law applies to EU companies with over 500 employees and a net global turnover exceeding 150 million. Non-EU companies are subject to the law if they generate a net turnover of 300 million in the EU, three years after the law comes into effect. Fines for non-compliance could reach up to 5% of a company’s global turnover. This directive grants communities worldwide the unprecedented ability to sue companies for human rights abuses and environmental harm in European courts.
Despite the potential positive impact, the law has faced criticism for adding reporting requirements on EU companies already obligated to comply with separate environmental, social, and governance (ESG) disclosures from 2024. Advocates, including Global Witness, laud the comprehensive legal framework established by the law, empowering communities globally to hold companies accountable for their actions.
The law’s influence extends beyond the EU, causing concerns among companies headquartered elsewhere, including in the United States. Critics argue that the final text has successfully avoided duplicating requirements between the CSDDD and existing ESG rules.
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What is the EU headquarters called?
The Commission’s departments and executive agencies are located in Brussels and Luxembourg. The Commissioners hold weekly meetings at the Brussels headquarters and in Strasbourg.
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Unlike NATO, which is a military alliance that protects territories from external threats, the EU’s defense policy is a part of its overall security policies. It’s important to note that the EU is not primarily a military organization, but rather a political and economic union. Therefore, its approach to defense is different from that of NATO. The EU’s defense policy is designed to complement its broader security objectives and ensure the safety and stability of its member states.
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The European Defence Union, also known as the Common Security and Defence Policy, boasts an active personnel count of 1,410,626 as of 2016. Additionally, the reserve personnel count stands at 2,330,803. The budget for this policy is a whopping 223.4 billion ($249.3 billion) as of 2018.
What is the biggest company in the EU?
The EU is home to some of the largest companies in the world, ranked by their market capitalization. Topping the list is Novo Nordisk with a market cap of $475.47 billion, followed by LVMH at $380.45 billion and ASML at $284.55 billion. L’Oréal also makes the cut with a market cap of $259.28 billion. These companies are just a few of the 57 that make up the list of the largest companies in the EU.