CEC European Managers welcomes the EU’s new Sustainable Corporate Governance initiative. In its reply to the European Commission’s consultation, CEC underlines the urgent need to not only create legal and fiscal incentives, but also to support a future-fit leadership culture and practice. The transition to a net-zero economy requires excellence in European leadership fostered through training, experimental sandboxes, as well as awareness-raising. As CEC’s “Sustainable Leadership in Europe” study shows, a vast majority of EU managers is currently not in the position to execute materiality assessments or stakeholder analysis – without even talking about the quality of such exercises.

As a follow-up to the European Green Deal, the Commission has announced a Sustainable Corporate Governance initiative for 2021. The initiative was listed among the deliverables of the Action Plan on a Circular Economy, the Biodiversity strategy and the Farm to Fork strategy. The Commission had previously introduced legislation on non-financial reporting (NFRD), as well as regulation on sustainability risks disclosure. While these create incentives “to report”, the Sustainable Corporate Governance initiative aims to introduce duties “to do”. Examples for the latter include corporate bonuses or conducting stakeholder impact analysis.

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