European Commission likely to be sympathetic to French government’s request to ease burden of corporate sustainability reporting

The European Commission may agree to a request by the French government to delay or relax the introduction of ESG reporting requirements under the Corporate Sustainability Reporting Directive, which begins this year, and the Corporate Sustainability Due Diligence Directive, with which the biggest companies will have to comply from July 2027. The French government says businesses need time to implement the measures, and should benefit from reduced complexity and a less onerous regulatory burden at a time when the US under Donald Trump is rolling back sustainability initiatives. The European Commission has already indicated its willingness to simplify the requirements under planned omnibus legislation and is due to publish proposals on February 26.

Best source: ESG Today

See also: Politico

Multinationals face growing divergence on ESG transparency requirements between EU and US

Multinationals face an increased risk of divergence in sustainability disclosure requirements, with new US president Donald Trump promising to roll back or suspend requirements on companies to report on greenhouse gas emissions and environmental or social impact in their supply chains. Although the European Commission insists Europe will not take part in a race to the bottom, it faces demands from member states including France to dial back the transparency burden on companies posed by existing and upcoming legislation. Next month the Commission plans to unveil proposals to streamline reporting requirements under the Corporate Sustainability Reporting Directive, which will also affect rules relating to the EU's Green Taxonomy and the Corporate Sustainability Due Diligence Directive, which will not take effect for another three years. Companies are ready to argue that other revisions to ESG requirements may be necessary to avoid placing EU businesses at a competitive disadvantage to US competitors.

Saarland courts summon Luxembourg business executives over unpaid VAT on leased cars between 2013 and 2021

Directors and executives of Luxembourg companies have been summoned by the courts in the German federal state of Saarland, where the tax authorities are seeking to recover VAT on cars leased for German-resident employees between 2013 and 2021, in cases where the employee contributed financially to the financing of the vehicle. In 2021, the European Court of Justice ruled that VAT should be paid in the employee's country of residence rather than in the grand duchy, and the German authorities are seeking to recover the tax with retrospective application since 2013, although the number of vehicles affected and the total financial impact remains unclear. Luxembourg's tax administration has yet to comment on the possible reimbursement of VAT paid in the grand duchy.

Best source: Paperjam (in French)

Austria arrests former property tycoon Rene Benko on suspicion of fraud, including hiding assets from creditors

Austria's Economic and Corruption Prosecutor's Office has announced the arrest of Rene Benko, founder of bankrupt property group Signa Holding, on suspicion of fraud, alleging he falsified an invoice and hid assets from creditors. He is alleged by prosecutors to have concealed his de facto control and beneficial ownership of a private foundation. Benko is also under investigation for misuse of Covid-19 pandemic funds, and an Italian court has issued a warrant for his arrest as part of a corruption investigation. The insolvency administrator says claims against Benko, who was arrested in Innsbruck, amount to about €2.4bn. The Signa group's assets include department store chains in Europe, including Germany's Galeria Kaufhof, as well as the Chrysler building in New York.

Best source: Deutsche Welle

UK regulator says wholesale brokers are underestimating money-laundering risks

The UK's Financial Conduct Authority has warned wholesale brokers that they are underestimating money-laundering risks and need to upgrade their financial crime scrutiny measures. The regulator says companies are depending too much on other parties in transaction processes to conduct AML checks on customers, and that they need to improve information-sharing and boost awareness of suspicious activity reports.

Best source: Reuters (subscription required)

See also: Financial Conduct Authority

UK catalytic converter manufacturer reduces hydrogen fuel investment under shareholder pressure

UK-based automobile catalytic converter and pollution filter manufacturer Johnson Matthey has bowed to demands from its largest shareholder, New York technology investment specialist Standard Investments, to reduce spending on hydrogen fuel technology as well as to review executive remuneration. Standard Investments has an 11% stake in Johnson Matthey, which missed analysts' forecasts for half-year revenue and profit last year as global car production fell, and is seeking a strategic review and executive changes.

Best source: Reuters (subscription required)

Law change in Ireland permits companies and other organisations to conduct virtual and hybrid AGMs

The entry into force of Ireland's Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act now allows companies and other organisations to hold virtual and hybrid annual general meetings. The legislation also gives more powers to the Corporate Enforcement Agency, extends the number of other agencies with which it can share information, amends the scope of involuntary strike-off powers, and revises the rescue process for small and micro businesses.

Best source: RTÉ News

Bankruptcy administrator for Benko’s prestige properties says former executives and board members face €1bn negligence liability

The bankruptcy administrator for René Benko's Signa property empire, Norbert Abel, says the group's former executives and board members are liable to pay around €1bn in compensation for neglecting their due diligence obligations. Individuals implicated include former chairman Alfred Gusenbauer, a former chancellor of Austria, and Robert Peugeot from the French automobile manufacturing family. Benko had grouped prestigious properties including the Hotel Park Hyatt in Vienna and the half-built Elbtower skyscraper in Hamburg within Signa Prime, one of the key companies of the Benko group.

Best source: Neue Zürcher Zeitung (subscription required, in German)

Half of companies due to report at risk of non-compliance with EU’s Corporate Sustainability Reporting Directive

Almost half of the businesses subject to the EU's Corporate Sustainability Reporting Directive are at risk of non-compliance, according to a survey by data management platform Sweep with Capgemini Invent. The directive came into application on January 1 this year for the largest listed companies domiciled in the EU. While 87% of the companies surveyed have begun collecting data, which is due to be reported next year, 47% have not yet conducted double materiality assessments to gauge the impacts of their activities on people and the environment as well as how sustainability-related issues can affect their business performance.

Best source: Funds Europe

UK regulators to ease reporting and investment rules in response to pressure from government: Bank of England’s Woods

Sam Woods, deputy governor of the Bank of England and head of its Prudential Regulation Authority, says the UK will ease its regulatory regime for banks and insurers, but insists he wants to avoid a race to the bottom with other jurisdictions on prudential rules. Testifying to the House of Lords Financial Services Regulation Committee, Woods says some requirements introduced after the global financial crisis may have been excessive and harmed the financial sector. The Prudential Regulation Authority and Financial Conduct Authority have been encouraged by the government to do more to encourage more risk-taking, and Woods says the central bank plans to lower the reporting burden on UK institutions and allow insurers to make more risky investments without prior regulatory approval.

Best source: The Guardian

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