Finance may be junked from EU climate law, leaked memo shows. Critics say it could be unenforceable

abcnews.go.com:

Flagship EU legislation that's meant to force European companies to screen out climate harms from their business operations faces being dramatically watered down

LONDON — A flagship EU law intended to push European companies toward net zero faces being seriously weakened by member states, a confidential document passed to The Associated Press reveals, with firms seemingly no longer forced to implement Paris Agreement goals.

The Corporate Sustainability Due Diligence Directive was designed to make companies eliminate environmental and human rights violations throughout all areas of their business. The legislation was meant to ensure firms’ operations were aligned with a global rise in temperatures of no more than 1.5 degrees Celsius (2.7 Fahrenheit).

But a Nov. 9 briefing obtained by The AP details a watered-down proposal that would drop the entire financial sector from the initial law.

Banks and insurers are among Europe’s biggest contributors to global warming, by financing or insuring new oil and gas projects, or agribusinesses that chop down tropical rainforests. Nonprofits also warn the new proposal would mean firms merely need to have plans to hit low carbon targets, not actually deliver them – a recipe for greenwashing.

When it was unveiled, environmentalists hailed the law. But there’s currently a standoff on the final text between the European Parliament, which wants tough legislation, and the Council of the European Union, formed of ministers from all 27 member countries.

Many of the latter want less onerous provisions, worried about the impact of stringent regulation on their economies.

Spain currently holds the council’s presidency, and is trying to get all the member states to agree on their desired version