EU Faces Pressure to Revive Its Social Investing Rulebook

(Bloomberg) -- The European Union is under pressure to revive plans to add a social pillar to its ESG-rulebook, after shelving the project last year amid political tensions.

A group of 13 organizations including ShareAction and Finance Watch called on the European Commission to publish a long-awaited report that would pave the way for new criteria to be added to the EU’s so-called taxonomy. The framework currently only covers climate and environmental activities.

Such an extension could encompass issues such as workers’ rights or access to housing, the group wrote in a letter to the commission. The EU’s executive arm had been due to publish a report on the matter at the end of 2021, but the social taxonomy was shelved in the middle of 2022 due to political disagreement over what to include. With the EU approaching the end of its legislative cycle, the decision was made to postpone the process indefinitely.

“It is due time for the commission to publish its own report, describing the provisions that would be needed to cover other sustainability objectives, such as social ones,” the group wrote in a letter addressed to commissioners Mairead McGuinness and Nicolas Schmit. “We urge you not to lose sight of the work to extend the current EU Taxonomy framework to include a social and human rights dimension.”

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