Corporate Sustainability Due Diligence Directive in trilogue negotiations

The document advocates for the inclusion of all financial institutions—including banks, insurers, asset managers, and institutional investors—within the scope of the CSDDD. It argues that the sector's immense scale and influence make it integral to preventing human rights and environmental harms. The briefing highlights that excluding the sector would contradict UN Guiding Principles and OECD Guidelines, and would leave a gap in conduct requirements that existing EU regulations like the SFDR and CSRD do not fill. It recommends that the CSDDD explicitly cover financing, investment, and advisory activities, while allowing for proportionate differentiation in how different types of financial entities meet their obligations without diluting the fundamental duties.

• The European financial sector is of a scale that makes its exclusion from the CSDDD unjustified; by the end of 2021, European asset management companies held an estimated EUR 32.2 trillion in assets under management, which is 170% of European GDP. Furthermore, in 2022, the total financial assets of all EU financial corporations were valued at €81 091 billion, significantly exceeding the €22 059 billion held by non-financial corporations.
• Financial institutions can be directly linked to, or contribute to, adverse human rights and environmental impacts, including those related to climate change, through their financing, underwriting, and advisory activities. The document cites UN communications regarding banks financing Saudi Aramco as evidence of impacts caused by the "exploitation of fossil fuels which contribute to climate change."
• Excluding the financial sector from the CSDDD would create a discrepancy between EU law and international standards, specifically the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, which hold all financial institutions responsible for respecting human rights.
• While the Sustainable Finance Disclosure Regulation (SFDR) and the Corporate Sustainability Reporting Directive (CSRD) require reporting and disclosure, they do not provide financial institutions with "concrete conduct requirements" or a legal obligation to act when adverse impacts are identified.

APA

ClientEarth (2023). Corporate Sustainability Due Diligence Directive in trilogue negotiations. https://www.clientearth.org/media/bemhlhl0/clientearth-briefing-3-pagers-csddd-trilogue-and-financial-institutions.pdf

Chicago

ClientEarth. Corporate Sustainability Due Diligence Directive in trilogue negotiations. 2023. https://www.clientearth.org/media/bemhlhl0/clientearth-briefing-3-pagers-csddd-trilogue-and-financial-institutions.pdf.

Wikipedia

{{cite report |author=ClientEarth |title=Corporate Sustainability Due Diligence Directive in trilogue negotiations |date=October 2023 |url=https://www.clientearth.org/media/bemhlhl0/clientearth-briefing-3-pagers-csddd-trilogue-and-financial-institutions.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{clientearth2023corporate, author = {{ClientEarth}}, title = {{Corporate Sustainability Due Diligence Directive in trilogue negotiations}}, institution = {ClientEarth}, year = {2023}, month = oct, url = {https://www.clientearth.org/media/bemhlhl0/clientearth-briefing-3-pagers-csddd-trilogue-and-financial-institutions.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }