Dear readers,
We are pleased to inform you that the Corporate Sustainable Due Diligence Directive (CSDDD) entered into force on 25 July 2024. This is a piece of legislation that aims at fostering sustainable and responsible corporate behaviour in companies’ operations and across their global value chains.
CSDDD establishes a corporate due diligence duty for companies operating in the EU or accessing the EU market. This means that companies have to identify and address potential and actual adverse human rights and environmental impacts in their own operations, those of their subsidiaries and those of their business partners (where they are included in their value chain(s)).
CSDDD also contains provisions to facilitate compliance and limit the burden on companies, both in scope and in the value chain. For example, CSDDD applies a staggered approach, with different deadlines for different groups of companies, depending on their size, sector and exposure to risks. CSDDD also provides guidance and support to companies when implementing the due diligence process, as well as mechanisms for stakeholder engagement, reporting and remediation.
CSDDD will be enforced through administrative supervision by national authorities, who will have the power to issue injunctive orders and impose effective, proportionate and dissuasive penalties (in particular fines) for non-compliance.
CSDDD is expected to bring multiple benefits for companies, such as better risk management, more resilience and increased competitiveness, attractiveness, innovation and access to finance. It will also contribute to the EU’s green and social objectives, such as the 2050 climate neutrality target, the European Green Deal and the European Pillar of Social Rights.
Please note that member states will have to adopt and publish, by 26 July 2026, the laws, regulations and administrative provisions necessary to comply with CSDDD.
We remain at your disposal should you have any queries on CSDDD, its scope and its implications for your business.