European Council waters down due diligence obligations

The EU body has largely exempted the financial services sector from additional due diligence requirements.

In its common position adopted last week, the European Council has agreed that member states will have to decide individually whether financial services will fall under the scope of the Corporate Sustainability Due Diligence directive. Introducing national discretion for due diligence practices by financial services firms de facto means that the directive will become optional, rather than mandatory, for many investors, banks and insurance companies operating across the EU.