The CSDDD largely follows the steps outlined in the OECD Guidelines for Multinational Enterprises on Corporate Social Responsibility, a voluntary framework for responsible business conduct. Companies subject to the CSDDD must conduct risk analyses and monitor, prevent, mitigate, remedy, and cease any harm to people and the environment within the value chain. Additionally, companies must develop a climate transition plan, which will be evaluated annually. Furthermore, companies must establish due diligence procurement policies and action plans, which must be made publicly available.
The Corporate Sustainable Reporting Directive (CSRD) sets the stage as a reporting regulation, emphasizing the importance of improving transparent sustainability reporting of EU companies and increasing the credibility and comparability of ESG efforts. By defining material topics and setting targets, companies disclose their environmental and social impacts, risks, and opportunities and how they act on these. The CSDDD takes this a step further by introducing mandatory value chain due diligence - it ensures that both EU and non-EU companies take responsibility for the negative impacts their activities in the supply chain cause globally.
The legislation will predominantly affect large companies (both within and outside the EU) with over 1000 employees and 450 million euros in turnover. European member states have a 2-year window to implement this law nationally, thus the implementation will be phased based on company size and turnover:
Grant Thornton Impact House is leading the charge in helping organisations prepare for CSDDD obligations, simultaneously supporting them in taking a large step to create transparency on Human Rights and Environmental Risks in their value chain and defining what actions to take to improve. Here is how we help our clients:
It is crucial to start drafting or updating your due diligence strategy in the run-up to its adoption in 2027-2029. This directive requires cooperation with many internal and external stakeholders.
Your organisation is a part of multiple value chains. Large customers will request information and may require you to adhere to their due diligence policies and procedures.
At Impact House, we strongly believe that considering the CSDDD deepens and adds value to your CSRD-proof reporting. Our experienced team is well-versed in navigating the complexities of Corporate Sustainability Due Diligence and offers support in every step of preparing for CSDDD. Below an overview of how we prioritize and approach negative impacts within your value chain.
Please contact Grant Thornton Impact House for an introductory conversation or sparring session: