Emerging Markets
Investment insights from Capital Group
Potential compliance year | EU company thresholds Number of employees | Global turnover |
---|---|
2027 | ≥5,000 | ≥€1.5B |
2028 | ≥3,000 | ≥€900M |
2029 | ≥1,000 | ≥€450M |
5,400+EU-based companies in scope,* including: | Non-EU-based companies |
---|---|
1,489 | Germany | In-scope company list to be published by European Commission, based on same turnover thresholds, but applied to turnover from the EU only. |
737 | Italy | |
481 | France |
*Timing for phased-in CSDDD compliance assumes rule enters into force in 2024. Number of in-scope EU-based companies are initial estimates calculated by the Centre for Research on Multinational Corporations (SOMO), based on the compromise proposal published in March 2024.
Sources: European Union and SOMO.
Example of risk | |
---|---|
Hallucination | AI models can make incorrect decisions and predictions — perhaps due to the limitation of datasets used in training. |
Intellectual property | There are legal uncertainties and risks associated with the outputs of generative AI that has been trained on text, images and other data that is copyrighted or patented. |
Regulation | Keeping up with fast-moving and, in some cases, divergent global regulations can create compliance challenges. |
Stakeholder misalignment | Corporate leadership, boards and workforces may not have the expertise or experience to judge the merits of AI and its alignment with corporate strategy. |
Bias | AI models can have implicit bias due to the limitations of datasets or interpretation of results. |
Examples shown for illustrative purposes only.
Source: Capital Group.
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Glossary:
Hard currency - government bonds issued by Emerging Market (EM) countries in major currencies which are widely seen as being more stable than local EM currencies, such as US dollars or euros.
Sovereign bond – a debt security issued by a national government.
Swap – a type of contract where one financial instrument is exchanged for another.
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