The European Parliament passed a new law to enhance corporate responsibility across global supply chains. The Corporate Sustainability Due Diligence Directive (CSDDD) mandates large EU companies to prevent environmental and human rights abuses.

This directive aims to reshape corporate responsibility in the EU by ensuring thorough due diligence throughout supply chains. It targets companies to proactively address environmental and human rights impacts in their operations, subsidiaries, and suppliers.

The CSDDD provides a flexible framework for tailored compliance systems, following UN Guiding Principles and OECD guidance. It includes policies, impact assessment, risk mitigation, monitoring, stakeholder communication, and remediation.

Implementation spans from 2028 to 2030 based on company size and market presence. Non-compliance can lead to regulatory action and civil liability cases pursued by NGOs.

After approval from the European Parliament and Council, the CSDDD will enter phased implementation, necessitating strategic preparation from businesses.