The EU’s draft Corporate Sustainability Due Diligence Directive (CSDD), over the next three to six years, is set to impose significantly greater obligations on businesses, to assess and address their human rights and environmental impacts, and to have a climate transition plan. Directly and indirectly, the Directive is likely to affect a large number of businesses in a range of sectors in the EU and outside it, across all scales.
If implemented in this or a similar form, this will be a meaningful ramp up in the responsibilities of business for their impacts. It will also bring into the realm of hard law for private companies a range of obligations which commonly exist only as “soft” law applicable to states. As a result, it will change the way in which in-scope businesses need to manage and resource their supply chain and procurement frameworks.
Unlike most other ESG obligations currently in force, this will not be a “comply-or-explain” obligation, but a “you-must-comply” obligation. It will require action beyond mere reporting, and comes with a regulatory and civil enforcement mechanism.
In this briefing, Jeff Twentyman and George Murray consider:
- what the draft CSDD requires, its scope and the novel concepts it introduces;
- what it will mean in practice, with a focus on the requirements to assess and address adverse human rights and environmental impacts;
- the top things businesses need to know about it now, and
- what you can do about it.