KPMG info: the European Council would ease the criteria for the Sustainability Screening of Companies

The purpose of the regulation is to increase the protection of the environment and human rights in the EU and worldwide. Companies covered by the directive will be required to identify actual and potential harmful environmental and human rights impacts not only in their own operations, but also in the activities of their subsidiaries and those in their value chain (suppliers), and must take measures to prevent and eliminate them.

At the same time, the directive was significantly simplified during the multi-round negotiations, since, while the original proposal would have applied to all companies with more than 500 employees and a net worldwide turnover of 150 million euros, the final version is only applicable to companies with more than 1,000 employees and more than 450 million euros covers companies with a turnover (including non-EU companies whose annual turnover from the EU exceeds EUR 450 million). In addition, the stricter set of rules designed for high-risk industries was also removed from the final version. As a result, the draft directive covers only 30% of the company’s originally planned workforce.