EU Takes Important Step On Supply Chain Due Diligence

The European Commission and European Parliament recently reached agreement on the details of a new Corporate Sustainability Due Diligence Directive. The Directive will require large organisations to implement due diligence processes with regard to human rights and environmental impact in their supply chains.

A number of European countries have legislation in place or under consideration requiring companies to perform supply chain due diligence. These rules vary widely in regard to exactly what they require and what companies they apply to. National governments and EU-based companies have called for European legislation to harmonise these due diligence rules, and in response the European Commission adopted a proposed EU Corporate Sustainability Due Diligence Directive (CSDDD) in February 2022. The European Parliament and the European Council adopted draft versions of the CSDDD, and entered into negotiations on a final Directive starting in June 2023.