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Due Diligence: ING case highlights legal risks

This case highlights the growing tendency of NGOs, with no mandate other than their own moral certainty, to confront multinational undertakings with complex legal challenges across a range of human rights and environmental issues.

Background: We recently wrote about the legal case being taken by an NGO in the Netherlands against ING bank alleging that its lending policies were in contravention of the Paris climate accord and that it should cease lending to clients that the NGO considered as pollutants. An interesting legal comment on the case has now been posted here. 

Why it matters: This case highlights the growing tendency of NGOs, with no mandate other than their own moral certainty, to confront multinational undertakings with complex legal challenges across a range of human rights and environmental issues. Ultimately, many of these challenges will be found by the courts to be without merit. But the time, legal costs, and managerial resources necessary to defend against these challenges can be considerable. 

What’s next: Businesses across Europe have legitimate concerns that the proposed Corporate Sustainability Due Diligence Directive would create a “legal free for all” for activist groups to launch multiple legal challenges against multinational undertakings across the length of global supply chains on the most dubious of grounds. It seems to us right and proper that the governments of EU Member States, through the Council of Ministers, should critically scrutinise what is being proposed. 

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Authors: Tom Hayes

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