The EU Corporate Sustainability Due Diligence Directive

Practical insights into value chain due diligence and risk management

In February 2022, the European Commission presented a Directive on Corporate Sustainability Due Diligence (CSDDD). The CSDDD is part of the broader transition of the European Union (EU) into a climate-neutral, resource-efficient and circular economy under the European Green Deal. The CSDDD seeks to integrate sustainability considerations into corporate governance in order to foster sustainable and responsible corporate behaviour. For the first time in the EU, cross-sector value chain compliance with human rights and environmental protection will become mandatory once the CSDDD enters into force. From 2024 onward, sustainability due diligence will play a more prominent role in corporate compliance and risk management. Companies will accordingly need appropriate counsel to help them navigate the corporate sustainability regulatory environment. Companies will have to set up new or update current du...

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Practical insights into value chain due diligence and risk management

1. Introduction

2. The EU Corporate Sustainability Due Diligence Directive

2.1. Background

2.2. Personal scope

2.3. Material scope

2.4. Human rights and environmental due diligence

2.5. Enforcement

3. Practical insights into compliance with the CSDDD  

3.1. How to prioritise adverse impacts based on severity and likelihood

3.2. Expect more EU due diligence guidance

3.3. Beware of interaction with EU competition policy

4. Conclusion