Understanding the Implications of the New Directive on Corporate Sustainability Due Diligence (CSDD)

In December 2023, the European Union adopted a Directive on Corporate Sustainability Due Diligence (CSDD). The aim of the Directive is through regulation to create an environment in which companies operating in the European Union ‘foster sustainable and responsible corporate behaviour and to anchor human rights and environmental considerations in companies’ operations and corporate governance’.

These new rules will ensure that businesses address the adverse social and environmental impacts of their actions, including in the full length of their value (supply, processing, distribution and sale or recycling) chains both inside and outside of Europe.  This Directive is one of the most comprehensive and forward-looking examples of legislation in this area and will be enforced at the EU Member state level. Although the UK is no longer an EU member state the nature of the Directive means it is still applicable to companies from the UK and outside of the EU. 

The measures bring improved protection of Human Rights, greater transparency, a healthier environment for present and future generations which aims to increase trust in businesses. 

Whilst the scope of this Directive is focused primarily on larger organisations that will be required to integrate policies and risk management systems in these areas into their business; they will also need to have a process for the identification, mitigation and remediation of these actions for their main operations, subsidiaries and business partners which effectively creates a compliance need for all smaller suppliers worldwide that intend to trade with ‘in-scope’ organisations.

The European Union are still confirming some of the finer details of the implementation and have given 2 to 3 years (depending on where your organisation fits in scope) for organisations to comply.

Whilst this may sound like a long time, the interconnectivity of organisations within the value chain, the global nature of such business and the systems that need to be implemented mean that organisations should approach this with a degree of urgency.

This training course has been developed with this in mind.  It will give you the knowledge and the tools you need to understand the implications of this Directive to your organisation and the preparations that you need to undertake to be ready and compliant with this prior to the date when it comes into force.  In doing so you will become a valued and trusted adviser within your business in this important area of Sustainability.

Whilst this Directive is a need for compliance, it is also an opportunity to review and improve current working practices, to promote a positive reputation and gain a competitive advantage.

This is part of our series of Corporate Strategy training courses covering a suite of the essential skills and best practices for all company directors and company secretaries, as well as business leaders and entrepreneurs in the ESG sphere.