The Pension Federation in the Netherlands and the Dutch Association of Insurers have urged policymakers to bring the financial sectors under a single European due diligence framework for sustainability and human rights.

The associations called for this framework to be in line with the OECD guidelines for multinational companies.

In February 2022, the European Commission made a proposal for the Corporate Sustainability Due Diligence Directive (CSDDD).

Under this proposed directive, both companies and the financial sector would have to identify and address abuses in their value chains.

The Dutch pension sector has been implementing sustainability due diligence based on OECD guidelines through the IMVB Covenant since 2018.

The Pension Federation stated that it therefore supported a European legislative framework that also applies to the financial sector, provided it is brought in line with OECD standards.

The role of the financial sector within the CSDDD is under discussion during negotiations in Brussels, which is why the Pension Federation and the Dutch Association of Insurers have sent a joint statement to relevant policymakers.

They also called on policymakers to stick to a single due diligence framework for financial institutions, rather than imposing different requirements on different sectors.

“The Deforestation Ordinance is also currently being negotiated,” the associations noted.

“This proposal would require companies to verify that goods sold in the EU have not been produced on deforested or degraded land.

“We believe that the proposal can make a major contribution to halting deforestation. The financial sector can also play a role in sustainable agriculture and the prevention of deforestation.

“However, including the financial sector in this law makes it more cumbersome and difficult to implement the requirements, because two due diligence frameworks then exist with different rules.

“This leads to additional regulatory pressure and the rules of the Deforestation Ordinance are not properly geared to the role that the financial sector can play.

“The financial sector should therefore be given a role as part of the CSDDD to help combat deforestation, but not be added to the Deforestation Regulation.”

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