European automobile manufacturers widely support the EU’s sustainability ambitions and, with that, the related framework of EU ESG-legislations. Over the past months however, a significant issue has emerged, where urgent Commission action is required.
Compliance with due diligence requirements under the various ESG legislations may be significantly impeded where mandatory third-country legislations restrict the collection, verification, disclosure or cross-border transfer of information required under EU law. This may create situations in which companies face conflicting legal obligations that cannot be fully reconciled, resulting in significant compliance risks and additional competitive pressures for automotive companies and the European industry as a whole.
Restrictions in third countries can prevent companies, suppliers and third-party service providers from collecting information, conducting audits, verifying data or transferring information needed to meet EU requirements. With several EU due diligence and sustainability rules entering into force or approaching implementation, this creates growing legal uncertainty and compliance risks for the automotive industry. (....)