Today, EU Parliament and Council negotiators agreed on new rules obliging firms to integrate their human rights and environmental impact into their management systems.
The Corporate Sustainability Due Diligence Directive (CSDDD) represents a groundbreaking development in the realm of corporate responsibility. Recently agreed upon by the European Union, the CSDDD sets forth stringent guidelines for companies to ensure that their operations safeguard human rights and the environment. This blog explores the implications, requirements, and impacts of the CSDDD on businesses operating within and beyond the EU.
The CSDDD is a legislative framework mandating EU and non-EU companies to integrate human rights and environmental considerations into their business practices. Targeting companies with a turnover exceeding €150 million, and smaller companies in sensitive sectors like textiles and agriculture, the CSDDD aims to foster sustainable and responsible corporate behavior.
The directive necessitates a shift in corporate strategy, focusing on ethical operations and sustainable practices. Companies are encouraged to scrutinize and adjust their supply chains, ensuring compliance with the directive’s human rights and environmental standards.
Failure to adhere to the CSDDD can result in significant penalties, including fines up to 5% of net worldwide turnover and public naming and shaming. This introduces a new layer of accountability, compelling businesses to align with the directive’s stringent standards.
The CSDDD is not just a European initiative but has global implications. It affects any company with significant operations or revenue streams within the EU, thereby setting a new global benchmark for corporate sustainability.
The agreed draft law requires formal approval by the Legal Affairs Committee and the European Parliament as a whole, as well as by the Council (EU governments) before it can enter into force.
The Corporate Sustainability Due Diligence Directive marks a pivotal moment in corporate governance. It shifts the focus from profit to a balanced approach that values people and the planet equally. As the world moves towards greater sustainability, the CSDDD stands as a beacon for responsible business conduct, influencing global corporate practices far beyond the EU’s borders.
DISS-CO® is an innovative legal tech company with a strong focus on sustainability, risk and compliance.
Cookie | Duration | Description |
---|---|---|
cookielawinfo-checkbox-analytics | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics". |
cookielawinfo-checkbox-functional | 11 months | The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". |
cookielawinfo-checkbox-necessary | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary". |
cookielawinfo-checkbox-others | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other. |
cookielawinfo-checkbox-performance | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance". |
viewed_cookie_policy | 11 months | The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data. |