Hello, Supply Chain Folks (and others). Just a quick reminder
The Directive on Corporate Sustainability Due Diligence CSDDD entered into force on 25 July 2024. It aims to foster sustainable and responsible corporate behavior in companies’ operations and across their global value chains. Member States must transpose the Directive into national law and communicate the relevant texts to the Commission by 26 July 2026.
➡️Obligations
This Directive establishes a corporate due diligence duty. The core elements of this duty are identifying and addressing potential and actual adverse human rights and environmental impacts in the company’s operations, their subsidiaries, and, where related to their value chain(s), those of their business partners. The CSDDD introduces several important requirements, such as (1) Access to Justice, (2) Risk Assessment and Management, and (3) Harmonised Legal Framework:
➡️Who is affected
📌Large EU limited liability companies & partnerships: >1000 employees and >EUR 450 million turnover (net) worldwide.
📌Large non–EU companies: > EUR 450 million turnover (net) in the EU.
SMEs: The proposed rules do not cover micro companies and SMEs. However, they might be pressured by their customers, employees, or NGOs.
➡️Enforcement:
The rules on corporate sustainability due diligence will be enforced through administrative supervision and civil liability within the EU Member States
➡️What to do now:
👊Stop complaining and whining. It will help you a lot with understanding your Supply Chain & Supplier Network!
📌Risk Management/Analysis: Identify & assess risks in your Supply Chain and implement mitigation measures. Constantly monitor your supply network to identify risks early. If not in place, build a comprehensive Risk Management for your Supply Chain
📌Establish Governance: Establish robust Governance (rp for due diligence, including mapping supply chains in detail and understanding key processes.
📌Supplier Engagement: Establish frequent and open communication with your suppliers to address issues promptly.
📌Data Management: Map your Supply Chain, gather and document supply chain data to increase transparency and traceability, and use digital solutions to reduce workload.
➡️Guideline
The European Commission just published a comprehensive FAQ for the CSDDD. The document also answers some questions about the treatment of non-EU companies. It sheds some light on unclear areas, such as discussions on risk-based due diligence and civil liability.
Still need help implementing the LkSG, CSDDD, or CBAM or in building an effective SCRM? Contact me