Download This PaperGreening Supply Chains and Their Financing under EU Law
David Snyder and Susan Maslow (eds), Contracts for Responsible and Sustainable Supply Chains: Model Clauses, Legal Analysis, and Practical Discussion (American Bar Association, Forthcoming 2023)
15 Pages Posted: 6 Aug 2022 Last revised: 6 Mar 2023
Date Written: July 13, 2022
Abstract
While corporate finance follows a general trend towards ESG branding by marketing financial instruments as ‘green’ or ‘environmentally sustainable’, investors often search for clear information on the greenness of their investment. The advanced EU legislation on green finance offers clear definitions, standards and disclosures for green financial instruments that can also cover the supply chain. The overall aim to reduce global CO2 emissions requires the greening of supply chains and companies, legislators and investors to include the supply chain in their ESG thinking. This paper offers ways to include the supply chain into the overall measurement of a company’s CO2 emissions and greenness for financial purposes under the Taxonomy Regulation, Sustainable Finance Disclosure Regulation, the Corporate Sustainability Reporting Directive and the proposed Green Bond Standard. In addition, it analyses the proposed obligations to green supply chains in substance under the proposed Corporate Sustainability Due Diligence Directive. Contracts governing international supply chains can increase their green credibility by drawing inspiration from recent EU legislation.
Keywords: supply chain, green finance, sustainable investment, disclosure, transparency, climate transition, climate liability, Taxonomy Regulation, Sustainable Finance Disclosure Regulation, Corporate Sustainability Reporting Directive, Green Bond Standard, Corporate Sustainability Due Diligence Directive
JEL Classification: K12, K13, K22, K23, K32, K33, K42
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