The Commission published the findings of its study on directors’ duties and sustainable corporate governance. The study shows that listed companies within the EU still tend to focus on short-term benefits of shareholders rather than on the long-term interests of companies. In its Communication on the European Green Deal as well as the recent Repair and prepare recovery plan, the Commission had highlighted that sustainability should be further embedded into the corporate governance framework.
This initiative aims to improve the EU regulatory framework on company law and corporate governance. It would enable companies to focus on long-term sustainable value creation rather than short-term benefits. It aims to better align the interests of companies, their shareholders, managers, stakeholders and society. It would help companies to better manage sustainability-related matters in their own operations and value chains as regards social and human rights, climate change, environment, etc.
A public consultation on sustainable corporate governance will be launched in autumn 2020. The Inception Impact Assessment for the initiative laying out the Commission’s initial ideas on the reasons for and the aims of the initiative is open for feedback.
The new sustainable corporate governance framework would positively contribute to the productivity, profitability and attractiveness of EU businesses due to a better management of sustainability-related risks, reaping opportunities and better taking into account the interests of all stakeholders.
The deadline for submissions is on October 8.