Association expresses concerns about Due Diligence Directive

The Dutch Association of Insurers, through the European umbrella organisation Insurance Europe, has expressed concerns about the European Commission's proposal for a Corporate Sustainability Due Diligence Directive (CSDDD).

The CSDDD proposal imposes obligations on financial institutions, such as insurers, on due diligence for the entire production process (the value chain) of a company in which they invest: from the development to the marketing and distribution of a product. The rules in the directive aim to reduce and prevent the negative effects on human rights and climate during the production process.

Aligns with existing regulations

The Association welcomes an unambiguous European standard for companies and expects that the rules will ensure that insurers can contribute to a transition to a sustainable economy. 'But', the Association emphasises, 'then the new EU legislation must be in line with the current agreements in the ICSR covenants, such as the ICSR covenant for the Dutch insurance sector'. With the help of these agreements, the sector, together with NGOs and the government, is already taking steps to prevent any abuses in the field of, among other things, the environment and human rights and to prevent them in the future. Alignment with other EU legislation, such as the CSRD, SFDR and OECD Guidelines, is also essential to avoid creating different legislative frameworks. Failure to do so will lead to problems in implementing the directive. In line with this, the Association also calls for more clarity about the supervision of the new directive.

No administrative liability

In addition, the Association objects to the proposal to hold company boards civilly liable if they do not meet the Due Diligence requirements. This would mean that drivers could be fined if a company in which they invest does not comply with the rules of the directive. Insurers do their best to exert influence through the ICSR covenant, but it goes too far to hold directors of insurers liable for the conduct of these companies.

Finally, it is important to clarify the definition of the value chain: what does or does not fall under the value chain? As long as this is not clear, ambiguities remain in the implementation of the directive.