Over 30 organisations, including ShareAction, WWF, Oxfam and Reclaim Finance, have written to the European Parliament’s Omnibus’s leading policymakers urging them to retain the review clause in the Corporate Sustainability Due Diligence Directive (CSDDD), requiring the Commission to assess whether financial institutions should be obliged to evaluate and mitigate their impacts on people and the planet.

The clause is “modest in scope but highly significant in person”, said the letter as it immediately imposes obligations on the financial sector but “merely asks for a review based on analysis and research” and would elevate EU credibility.

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Removing this clause, amid the pushback on the sustainable agenda, would send the wrong signal suggesting that the financial sector can remain shielded from responsibility for human rights abuses and environmental harm, the organisations said.

“Removing this clause would send the wrong signal: that the EU is willing to let the financial sector off the hook; that high-risk investments can continue to fuel human rights abuses and environmental destruction without consequences; and that systemic risks for investors themselves may grow unchecked.

In an era of unprecedented environmental degradation and growing social inequality, this is not tenable. In particular, with the recent ruling from the International Court of Justice stating that EU member states must explore all avenues to address the climate crisis and comply with the Paris Agreement,” the letter said.

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Whereas committing to this clause would enable better understanding of how finance and investment decisions are impacting fossil fuel expansion, deforestation, and human rights abuses in supply chains.

“To exempt them indefinitely is to undermine the very premise of the directive: that all companies bear responsibility for their impacts on people and the planet,” the letter added.

ActionAid, Americans for Financial Reform, Association of Ethical Shareholders and FairFinance were also among the letter signatories. The full letter and list of signatories can be viewed here.