In the European financial sector, sustainability considerations increasingly restrict the contractual freedom of banks and other financial institutions. Using Dutch law as a case study for the impact of EU law on national contract law, this chapter examines these restrictions across three stages—the pre-contractual stage, the content of contracts, and termination or suspension of the contract—and assesses them against three criteria: legitimacy, proportionality, and consistency. It analyses statutory duties under the CSDDD alongside civil-law duties of care, arguing that duties of refusal towards upstream business partners can be regarded as proportionate, whereas a general downstream duty of refusal risks being disproportionate absent global acceptance. The chapter shows that EU sustainability regulation is being transformed: the second von der Leyen Commission’s simplification agenda and the CSDDD2 amendments—notably abolishing the duty to terminate business relationships—signal a shift away from ever-stricter constraints towards reconciling sustainability objectives with European competitiveness.

Read the entire article here: https://ssrn.com/abstract=7118243 or here: https://dx.doi.org/10.2139/ssrn.7118243.