Dutch banks support the proposal for EU legislation on supply chain due diligence

The Dutch banking sector supports the upcoming proposal by the European Commission for a broad supply chain due diligence requirement for European companies. The Dutch Banking Association has expressed this view in its response to the European Commission’s consultation on the initiative on sustainable corporate governance. Due diligence norms established at EU level would ensure a level playing field between companies and would provide consistency and clarity on the requirements in the field of sustainable corporate governance.

Nederlands

New rules on mandatory due diligence legislation should build upon the voluntary practices that already exist. In their Responsible Business Conduct (RBC) process, businesses and banks already work on their due diligence policy together with stakeholders. A due diligence obligation with clear requirements and definitions embedded in law would help to advance these conducts. However, it is important that any new obligations stemming from new legislation would rest on the company itself and not on individual directors. A legal duty of care imposed on an individual company director could result in companies de-risking and divesting from challenging supply chains rather than seeking to improve adverse supply chain impacts. Individual directors should follow a holistic approach and consider the interests of all stakeholders when it comes to governance structures. This is already required in the Netherlands by the Dutch Corporate Governance Code, the Banking Code and the bankers’ oath. As appropriate norms have already been laid down in national codes, new rules in this aspect are therefore not needed.