Today the EU comes a step closer to Sustainable Supply Chains and has moved up a gear in the push to improve the sustainable accountability of large companies towards their suppliers and vendors by clarifying a number of key issues in the Corporate Sustainable Due Diligence Directive (CSDDD or CS3D):
What is the CSDDD?
Large companies in the EU with over 500 employees and a net turnover of €150m pa will be required to carry out due diligence on the human rights and environmental activities of their supply chain partners both inside and outside the EU. The Directive places the burden of responsibility for sustainable oversight on the shoulders of large companies.
What is the purpose of CSDDD?
This is essentially a way of bringing the economic engine of the EU reflected in its 28m SMEs into the Green Deal framework to support the goals of the climate transition without overburdening smaller businesses with administrative and regulatory red tape. In order to avoid disadvantaging EU SMEs, CSDDD will also apply to suppliers in a value chain based outside the EU, including the UK.
Who does CSDDD apply to?
The CSDDD will apply to the following business types and their supply chains:
Whats new in the latest announcement?
The deal struck today clarifies a few additional points which matter to businesses, including:
1) Imposing heavy fines on companies that violate the directive (buyer and vendor) of up to 5% of net turnover.
2) Granting a 5 year window for those affected by adverse human rights or environmental impact to seek justice from those responsible.
3) Reducing the amount of evidence required and costs incurred to provide justice for claimants.
4) Obliging buyers to engage and remediate with vendors who are in breach as part of their DD responsibility.
5) Giving companies to right to end their relationship with members of their supply chain as a last resort.
6) CSDDD could be included as a condition for the award of public contracts.
For more information on your responsibilities and rights as a supplier of goods and services into corporate supply chains, contact The Disruption House or email info@thedisruptionhouse.com
Or to read more on this Press Release click here
