EU legislators have agreed on a new piece of draft legislation that imposes a due diligence obligation on company directors to assess, identify, and evaluate risks, and implement mitigation strategies in respect to human rights and environmental supply chain issues. Negotiators of the EU Parliament and European Council, two key legislative bodies of the EU, reached agreement of the text, making it almost certain that the requirements will become law throughout the EU.

EU member states have reached agreement that will pave the way for ESG rating providers to be authorised and supervised by the European Securities and Markets Authority (ESMA) and comply with transparency requirements, notably in regard to their methodology and sources of information.

Negotiators at the European Council, the EU institution which represents EU member state heads of state, reached agreement in late December for negotiations on the final text of the legislation to begin with other EU institutions, notably the European Parliament.