How Can Companies Prepare For The Upcoming Wave Of ESG Whistleblowers In Europe?
Companies with operations in Europe are facing changes brought about by the new EU Whistleblower Directive and the corresponding national implementing laws. Key new rules oblige companies to set up internal reporting channels and scrutinize how they conduct internal investigations and treat whistleblowers. At the same time, many companies are under increasing pressure to improve and disclose their environmental, social and governance (“ESG”) practices. This article looks at what companies operating in EU member states should be doing to prepare for the upcoming wave of ESG whistleblowers in Europe.
Board directors of companies with significant operations in the European Union know all too well that their companies are increasingly expected to embrace sustainability and address ESG requirements. 2021 was an illustrative year in that respect, amplified by a number of legislative initiatives that impacted companies’ ESG disclosure obligations. Among them are the EU Sustainable Financial Disclosure Regulation (“SDFR”), which details requirements for sustainability-related disclosures in the financial services sector, in effect since March 10, 2021. The SDFR imposes sustainability disclosure obligations covering a broad range of ESG metrics both at the entity and the financial products levels. Also, the new related EU “Taxonomy Regulation”, in effect on a phased basis since 1st January 2022, establishes companies’ obligations to disclose how and to what extent their activities are associated with environmentally sustainable economic activities.
