EU Platform publishes a final report on minimum safeguards

The Platform on Sustainable Finance ("the EU Platform") published a final report on compliance with the "minimum safeguards" in October 2022 (hereinafter the “final report”).

The final report is intended to provide guidance on how compliance with minimum safeguards, as a criterion for taxonomy compliance, could be concretely assessed.
The EU Platform identifies the following four thematic areas in which minimum social standards should be assessed (cf. Art. 18 of Regulation 2020/852/EU (the "Taxonomy Regulation")):

• Human rights (including worker and consumer protection);
• Bribery, solicitation and extortion;
• Taxation; and 
• Fair competition.

With regard to these topics, the EU Platform proposes concrete criteria which, if met, would be deemed not to comply with the minimum safeguards. A violation of the minimum standards on human rights is said to exist in the following cases:

• No suitable procedure in the company to check the human rights due diligence obligations;
• Clear evidence that the company is not adequately implementing human rights due diligence and is thus committing human rights violations;
• Status of "non-compliance with minimum standards" should persist until the company demonstrates improvement in its human and labour rights processes to prevent repeated violations.

The EU Platform criticises the current market practice of using the controversial screening alone to verify compliance with the minimum protection.