Mr. Conor Linehan:

In our set of written submissions on behalf of the Law Society, and I acknowledge the contribution of Dr. Geoffrey Shannon, senior council of the Law Society, we have looked at the overall legal design of this measure and who it applies to, and we have indicated why we think it is particularly positive that it covers regulated financial undertakings - lenders, essentially. We have looked at what obligations it creates and whether they are reasonable, proportion or an unfair regulatory burden; what enforcement looks like and who will regulate. I am very happy to take any questions on any of those points from the submission. A key question, of course, is whether this is doable as a legal regime and will it work. Is it an appropriate area for regulation at all? We believe the answer to all of those points is "Yes". There are legal and regulatory regimes in the EU environmental law field that are equally ambitious, far-reaching and testing and function well in achieving their objectives. Therefore, we consider this to be feasible.

At its height - at its best really - what will corporate sustainability due diligence look like in practice under this measure? I will take some extraterritorial examples though of course the measure is very much about corporate due diligence at the local, regional and national scales as well. I will take a number of the classic scenarios that this measure is designed to address. It is clear that while an Irish-headquartered entity, running a global food business or importing raw materials from South America, west Africa, or wherever, is already required to manage the local environment here in Ireland through the Environmental Protection Agency, EPA, license or whatever other pollution controls apply, it will now be required to think about identifying adverse human rights and environmental risks and impacts abroad at a transboundary level in terms of waste, any human displacement, indigenous rights or land grabbing, directly or indirectly associated with its operations and supply or value chain abroad. Some transboundary due diligence is, of course, undertaken by some businesses under voluntary corporate social responsibility or environmental, social and governance, ESG, but a huge amount is not done, or at least remains to be done and there are important differences and advantages under the proposed approach.

A huge amount is not done or at least remains to be done and there are important differences and advantages under the proposed approach. There is much greater level of detail, rigour and analysis required for the COM (2022) 71 sustainability policies, risk identification and follow-through that is expected. This will have the force of law and the Law Society considers that the environmental and climate emergencies now require that we move from voluntary to legal approaches in this area. Most importantly of all, this is not about other regimes such as the non-financial reporting directive, which is largely about seeing environmental or climate risk as business risk for disclosure to the market for investment decision-making. That has an important role to play, but this COM (2022) 71 initiative is directly about the people and the environment that are to be protected for their own sakes and the draft directive uses that term "protected persons". That is what really stands out in this proposal and is what we believe is needed at this time.

We agree with the principle of this proposal. It is ambitious in terms of its design, but we think that is a positive feature. Some of it be challenging for regulated companies and for the supervisory authority here, but there are a range of other EU-based environmental regimes with detailed requirements on prior impact assessment, reporting, mitigation, monitoring and verification, such as project-related environmental assessment, the EU chemicals regime, and the EU carbon emissions trading scheme. All of those three are highly complex EU environmental-related regimes that function well.

Briefly, on the identity of the supervisory authority here in Ireland, we have made some written comments on this, highlighting in particular the likely need for skills and experience beyond general corporate supervisory or corporate governance experience to include also people with experience in the fields of environmental protection but particularly in the human rights field to be able to assess, for example, whether reports have adequately documented human rights risks and impacts and to be able to assess compliance.

Those are some additional remarks to supplement the written points we have already made and, again, I am very happy to take questions on those or on this oral submission.