Following the large majority for her report on sustainable finance, rapporteur and Green MEP Molly Scott Cato has called on the Commission to be more ambitious on the sustainable finance agenda.
‘My report on sustainable finance calls on investors to carry out mandatory due diligence on their investments. This is essential to provide clarity to investors on the impact of their investments on human lives around the world as well as on the environment. Integration of ESG factors into the financial framework is needed in order to reveal which investments are being directed towards projects that destroy the environment and social well-being.’
Scott Cato has drawn attention to the inadequacy of existing protection measures using the example of the Fundão dam in Mariana, Brazil. As a member of the Parliament’s Eurolat delegation she recently met survivors of this disaster:
‘The Fundão dam disaster is a classic example of the damage to people’s lives when corporations and the banks who finance their activities are not adequately regulated. HSBC and BNP Paribas finance Samarco Mineração SA (Samarco) mining company. Because of the lack of mandatory disclosure, it is unclear how much information concerning whether the banks conducted their due diligence properly but if they had done so they should have discovered that Samarco repeatedly failed to address basic security measures and environmental protection standards, including the lack of an emergency evacuation action plan for the Fundão Dam – a legal requirement in Brazil for dams classified as having a high potential to cause damage.’
‘When we make investments or buy pensions we need to be sure that we are not investing in companies or projects that can destroy lives on the other side of the world. Only mandatory reporting of ESG factors can ensure this.’
On 5 November 2015, Samarco Mineração, a limited liability joint venture between the Anglo-Australian BHP Billiton Brasil Ltda. and the Brazilian Vale S.A. companies, was responsible for the worst environmental catastrophe in Brazilian history. The Fundão tailings dam collapse killed 19 people, destroyed entire villages – including 349 houses, schools and churches –and contaminated the Gualaxo do Norte, Carmo and Doce rivers and impacted around 2,200 hectares of land along 650 km of river, by spilling about 60 million m³ of toxic waste.