If it is up to a majority of the European Parliament, the financial sector in the EU should fall under the European duty of care. The sector is currently exempt from this. ‘Loans should not be used for the manufacture of chemical weapons or other prohibited things,’ explains EU correspondent Mathijs Schiffers of the FD.
Last year, the European member states decided that the financial sector would not fall under the duty of care at European level. It instructs companies and institutions to detect abuses when it comes to the violation of human rights and climate in supply chains. ‘In the end, member states wanted to leave it to the countries themselves,’ says Schiffers. But the European Parliament now thinks differently.
‘An institution can cause abuses, contribute to them or be affiliated with them’
The European Parliament decided this week that the banks are indeed responsible for what happens to money lent. ‘There are three degrees,’ says Schiffer. ‘An institution can cause abuses, contribute to them or be affiliated with them. The latter is the mildest form, but then you still have a certain responsibility. Member states will have to return to the negotiating table with parliament.’
Ultimately, the decision on the matter does not lie with the European Parliament, but with the European Commission. In addition, the proposal must also pass through the legal committee of the European Parliament and must survive the plenary session.
Finally, negotiations still have to take place with the Council, the decision-making body of the member states. ‘They won’t take place until after the summer, so it will all take a while.’
