Thursday, 15 September 2022
Department of Enterprise, Trade and Employment
68. To ask the Minister for Enterprise, Trade and Employment his plans to implement the European Directive for Corporate Social Responsibility in Ireland; and if it will be linked to the Pobal deprivation index in order to benefit communities who most need it. [45052/22]
I understand that the Deputy is referring to the proposal for a EU Corporate Sustainability Due Diligence Directive and how it might help support communities, particularly in areas of deprivation. The proposal sets out obligations for companies regarding adverse human rights and environmental impacts arising from their operations, their subsidiaries and their value chains. The proposal is at an early stage of discussions at Council Working Party.
The Deputy may also be interested in the Corporate Sustainability Reporting Directive. It achieved political agreement between the European Parliament and the Council in June and, when it is formally approved, Ireland will have 18 months to transpose the new rules.
The Directive is one of a number of measures under the European Green Deal and the Sustainable Finance Agenda. It requires all large companies, banks, insurance undertakings and companies listed on main stock markets including SMEs to report annually on their performance in respect of environment, social and governance matters including human rights. The reporting itself must be done according to mandatory EU sustainability standards which are being developed by the European Financial Reporting Advisory Group.
The Directive will support the objective of decoupling of economic growth from resource use, ensuring that all regions and citizens of the European Union participate in a socially just transition to a sustainable economic system so that no person and no place is left behind. It will reorient capital investment towards sustainable investment to achieve sustainable and inclusive growth.
By way of example in respect of reporting on social matters, the draft EU standards propose disclosures by companies on how they affect local communities through their operations and value chain and on business risks and opportunities related to their impacts and dependencies on local communities. The local community can range from those living close to the companies’ operations to those living at a distance.
It is reasonable to assume that both Directives will encourage more socially responsible behaviours which will benefit the local communities in which companies operate.The Pobal HP Deprivation index will likely be of relevance to companies consideration of the local communities in which they operate in Ireland.