Skip to content
  • MyNewMarkets.com
  • Claims Journal
  • Insurance Journal TV
  • Academy of Insurance
  • Carrier Management
Insurance Journal - Property Casualty Industry News

Featured Stories

  • Lengthy Government Shutdown to Impact Insurers
  • FEMA, Customs and Border Protection Staff Data Stolen
  • Articles
  • Jobs
  • Markets

Current Magazine

current magazine
  • Read Online
  • Subscribe
  • Login
  • Front Page
    • National
    • International
    • Most Popular
    • Magazine
    • Forums
    • Blogs
    • Videos/Podcasts
    • Newsletters
  • News
    • Most Popular
    • National
    • International
    • East
    • Midwest
    • South Central
    • Southeast
    • West
  • Magazines
  • Research
  • Directories
  • Jobs
  • Features
    • Events
    • Forums
    • Market Directories
    • Quotes
    • Polls
    • Rankings & Awards
    • Insurance Giving Back
  • Subscribe

Banks, Insurers May Escape EU’s Toughest ESG Regulation So Far

By Frances Schwartzkopff | November 14, 2023
Email This Subscribe to Newsletter
  • Article

Banks, asset managers and other financial firms have won a reprieve from Europe’s most consequential ESG regulation to date, as a wave of intense industry lobbying pays off.

Spain, which holds the European Union’s rotating presidency, has proposed that financial firms be excluded from the initial roll-out of the Corporate Sustainability Due Diligence Directive, according to a Nov. 9 draft proposal seen by Bloomberg. The proposal still requires the approval of member states and lawmakers.

CSDDD, which the EU plans to use as a tool to force all industries to pay more attention to the value chains connected to their operations, has the potential to expose firms to unprecedented legal risk. If a single link in a firm’s value chain is tied to human rights abuses, environmental destruction or similar acts, Brussels wants to hold the EU-based business accountable.

The finance industry has lobbied hard against being included in the scope of the directive, arguing that such a wide-reaching rule is reasonable to consider for manufacturers, but not for banks, asset managers and insurers. The negative fallout would be “huge,” Philippe Angelis, senior policy adviser for corporate reporting and sustainable finance at Insurance Europe, said earlier this year.

The international scope of the directive has also raised concerns outside the EU. In June, Treasury Secretary Janet Yellen warned of the potential “negative, unintended consequences” facing US firms because of CSDDD.

Treasury Secretary Janet Yellen Testifies before House Financial Services Committee in June 2023. Photo credit: Al Drago/Bloomberg

Jose Manuel Campa, chairman of the European Banking Authority, says it’s logical to include banks in the directive because giving individual sectors too much leeway ultimately allows them to say they don’t care what happens in their value chain.

“I like the philosophy of the directive, which is what we apply in our prudential requirement,” Campa said.

The European Council and Parliament will hold negotiations later this month on moving forward with CSDDD. Until now, whether to include the finance industry had remained a key sticking point in reaching an agreement before the end of the year. Spain’s proposal is intended to allow the broader talks to continue, with a view to returning to the issue of whether to include banks at a later date, according to the draft.

CSDDD is the key plank within the EU’s package of legislation designed to make its economy sustainable by holding businesses accountable for their social and environmental impact. Under the directive, companies would face civil liability and potentially large administrative fines if they fail to comply.

In June, the EU Parliament agreed to include the finance industry in CSDDD. But already then, the lawmaker who spearheaded the initiative, Lara Wolters, said she was bracing for pushback during talks with the EU Council.

Within the EU Council, however, member states can’t agree on how to proceed, according to the draft proposal seen by Bloomberg.

There was a “complete split” in early discussions over including the financial industry, with some countries being “flexible to an ambitious approach” while others pointed to the lack of an impact analysis and “practical difficulties,” according to the document.

Excluding banks from CSDDD would undermine its clout, nonprofits have warned.

Spain’s proposal is “a very big mistake,” said Isabella Ritter, EU policy officer at London-based ShareAction. It will also make reaching a compromise “quite challenging” because “the European parliament firmly stands behind the financial sector inclusion.”

Top photograph: Visitors view the city skyline from the outdoor viewing area at the Circulo de Bellas Artes de Madrid (CBA) building in Madrid, Spain, on Tuesday, Dec. 27, 2016. Photo credit: Angel Navarrete/Bloomberg

Copyright 2025 Bloomberg.

Topics Carriers Legislation Europe

Was this article valuable?

Thank you! Please tell us what we can do to improve this article.

Thank you! % of people found this article valuable. Please tell us what you liked about it.

Here are more articles you may enjoy.

Transportation Department Tightens Noncitizen Truck Driver Rules
US Government Shutdown Curtails Key Weather and Climate Programs
Adobe stockHanover Must Pay Rock Singer $2M in Case of Studio Arson, Court Says
IBHS Study Shows Smaller Hail May Be More Damaging to Roofs Than Once Believed

Written By Frances Schwartzkopff

More From Author

Interested in Carriers?

Get automatic alerts for this topic.

Email This Subscribe to Newsletter
  • Categories: International & Reinsurance NewsTopics: Corporate Sustainability Due Diligence Directive, environmental social and governance (ESG) criteria, EU ESG rules, EU financial services, EU insurer regulation
  • Have a hot lead? Email us at newsdesk@insurancejournal.com
More News
EU Eyes Sanctions on Fake Flags Used by Russia Shadow Oil Fleet
Italian Families Target Facebook, Instagram and TikTok Over Child Safety
Chobani Urges End to Dannon Parent’s Cold-Brew Coffee Lawsuit
AI-Power Boom to Drive $1.1 Trillion in US Utility Grid Spending
More News Features

Read This Next

  • Banks, Insurers May Escape EU's Toughest ESG Regulation So Far
  • House Bill Aims to Combat Forum Shopping in Trucking Industry Lawsuits
  • Insurance Industry Reps Back Reauthorization of Federal Terrorism Backstop
  • Hundreds of Flights Snarled at Dallas Airports Over Equipment Issues, FAA Says
  • Judge Clears Florida Officer in Shooting of UPS Driver, Citing 'Stand Your Ground'

Insurance Jobs

  • Senior Insurance Agent (3+ Yrs P&C Exp | W-2 | Warm Leads | In-Office Only) Senior Insurance Agent (3+ Yrs P&C Exp | W-2 | Warm Leads | In-Office Only) - Westminster, CO
  • Claims Manager, Insurance & Risk Management - Queens, New York
  • Customer Service Agent – Personal Lines - Bethlehem, PA
  • Account Executive Officer, Commercial Accounts - Richardson, TX
  • Bilingual Direct Sales Agent Specialist (2812) - Foley, AL
MyNewMarkets
  • How to Attract the Next Generation to Insurance
  • 5 Evolving Trends Shaping Architects and Engineers Coverage
  • Rethinking Assault & Battery Liability in Commercial Real Estate
  • From Golf Greens to Sausage Fests: The Wild World of Prize Insurance
  • As Schools Prepare to Pay Athletes, What Role Will Insurance Play?
Claims Journal
  • Tesla Unveils Lower-Cost Models in Drive to Reignite Sales
  • Expert: Inflation Continues to Sew Uncertainty in Auto and Auto Repair
  • Negotiation Is the Job: Reframing Defense Work in an AI-Enhanced Era
  • Jaguar Land Rover Bailout Shows Rising Cost of Cybercrime
  • Chobani Urges End to Dannon Parent's Cold-Brew Coffee Lawsuit
Academy of Insurance education
  • October 9 Forward Into The Past: Certificates of Insurance, Additional Insureds, and Other Contractual Risk Transfer Issues
  • October 16 Auto Insurance: You Get What You Pay For
  • October 23 Gotchas That'll Getchya - Latest Policy Language That'll Get You Sued
  • October 30 Challenges in Agency Mergers – Reducing Staff Flight and Avoiding E&O Claims

Insurance News

  • News by Region
  • News by Topic
  • Yesterday

Site Search

Features

  • Insurance Markets Directory
  • Forums
  • A.M. Best Company Ratings
  • Industry Events
  • Agencies For Sale
  • Newswire
  • Insurance Jobs
  • Rankings & Awards

Connect with us

  • Email Newsletters
  • Magazine Subscriptions
  • For Your Website
  • RSS Feeds
  • Twitter
  • Facebook
  • LinkedIn
  • Do Not Sell My Info

Insurance Journal

  • Submit News
  • Advertise
  • Subscribe
  • Reprints
  • Link to Us
  • Contact Us

Wells Media Group Network

  • Insurance Journal
  • MyNewMarkets.com
  • Claims Journal
  • Insurance Journal TV
  • Academy of Insurance
  • Carrier Management
© 2025 by Wells Media Group, Inc. Privacy Policy | Terms & Conditions | Site Map