EU: European Commission launches public consultation on sustainable corporate governance

In deciding to launch a reflection on the subject of sustainable corporate governance the EU Commission explained that in order to ‘foster long-term sustainable and responsible corporate behaviour’, corporate governance methods need to be reviewed, ‘because many companies still focus too much on short-term financial performance compared to their long-term development and sustainability aspects. The first step of this process is the launch of a public consultation running from 26 October until 08 February 2021 (here), the results of which should feed into a proposal to be presented in 2021. During an event organized by the Politico publication on 27 October, European Commissioner for Justice, Didier Reynders, mentioned that this reflection should lead to corporate management bodies being required to adopt and communicate long-term strategies. This topic, together with the Commissioner’s project to create human rights due diligence requirements for multinationals across their ‘first level’ supply chain elements (c.f. article No. 11914, initiative expected for 2021), which would encourage them to improve the practices of their own subcontractors and suppliers, plus a new agenda for consumers aimed at boosting product transparency (announced for November) all combine to make an arsenal of measures that should lead companies to be more concerned about the social and societal impacts of their activities.