DEFINE MEASURES TO BE TAKEN BY INSTITUTIONAL INVESTORS AND ASSET MANAGERS

The JURI Committee proposes a new Art. 8a to the CSDDD that specifically targets institutional investors and asset managers. Those FIs have to induce their investee companies to bring actual impacts to an end (Art. 8a (1)) or at least to minimise such impacts (Art. 8a (2)). For those purposes, institutional investors and asset managers shall be required to engage with investee companies, e.g. by exercising voting rights. This specific provision is to be welcomed as it provides guidance for investors and recognises the leverage that they have regardingthebehaviourofinvesteecompanies. However,theprovisionshouldbeextendedtothepreventionofpotentialadverseimpacts(Art.7).Theleverage large investors have shouldnot only bemobilised retroactively to past violationsbut also to prevent potential adverse impacts. Furthermore, divestment should be explicitly mentioned as a last resort where (potential) adverseimpactsaresevere,andengagementhasultimatelyfailed.