Financial services companies will be required to take action if their clients fail to protect human rights and the environment. This is according to a preliminary agreement to be voted on by a panel of EU lawmakers on April 24th.
This is following and back and forth discussion on the new directive, as last December, EU states agreed to exempt financial services from the rules. However, the Parliament's lead legal committee then decided to take a vote on the draft end of April and its members reached a tentative cross-party compromise that includes financial services, creating a controversy. It will be interesting to see which stakeholder group will prevail.
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Which companies will the new EU rules apply to? Large EU limited liability companies: Group 1: +/- 9,400 companies - 500+ employees and net EUR 150 million+ turnover worldwide. Group 2: +/- 3,400 companies in high-impact sectors. - 250+ employees and net EUR 40+ million turnover worldwide, and operating in defined high impact sectors, e.g. textiles, agriculture, extraction of minerals. For this group, the rules start to apply two years later than for group 1.
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