CSDDD: CORPORATE SUSTAINABILITY DUE DILIGENCE DIRECTIVE
Meet the requirements of the Corporate Sustainability Due Diligence Directive (CSDDD) with our customized system.
THE CORPORATE SUSTAINABILITY DUE DILIGENCE DIRECTIVE
A Milestone for Corporate Responsibility and Sustainability in the EU
The European Supply Chain Directive, CSDDD or CS3D, establishes a unified legal framework for due diligence processes to address human rights violations and environmental impacts in companies and to reinforce accountability for people and the environment. It aims to harmonize competitive conditions in the EU market.
Despite similar objectives of promoting sustainability and preventing human rights violations and environmental impacts in global supply chains, the CSDDD and the law currently enforced in Germany, the Supply Chain Compliance Software system , differ in their geographical scope, legal anchoring, and specific requirements for companies.
SIMPLE COMPLIANCE WITH CSDDD
Core Elements of the CSDDD Module
Compliance Solutions’ CSDDD module can be implemented into your system as an extension of the Supply Chain Compliance Software system, providing a structured approach to compliance and ensuring organizational sustainability. Your organization can achieve the following benefits:
Simple implementation
of the EU CSDDD
Legally compliant fulfillment
of all requirements
New workflow of the CS3D system
AI-supported,
automated,
and resource-saving
Risk management
and risk analysis
Simple implementation
of the EU CSDDD
Fulfillment
of all requirements
Fast imple-mentation of the LKSG software
AI-supported,
automated,
and resource-saving
Risk management
and risk analysis
THE NEW WORKFLOW OF THE SUPPLY CHAIN COMPLIANCE SYSTEM
The CSDDD Module and your Supply Chain Compliance System
Compliance Solutions offers a workflow-driven, fully risk-based solution for supply chain compliance. This includes:
- An automated, AI-powered risk calculation that provides accurate data
- A comprehensive screening of supply chain and corruption-related issues
Furthermore, the Corporate Sustainability Due Diligence Directive module is seamlessly integrated into the existing workflow to ensure thorough enforcement of these new standards. This is made possible by Compliance Solutions’ dynamic systems, which can be customized for every need. With Compliance Solutions’ supply chain compliance software, customers can remain safe and compliant with the CS3D.
CSDDD and Supply Chain Compliance System - a comparison
The CS3D directive applies EU-wide and thus supplements the existing supply chain regulations of countries that are already taking part. In comparison to a supply chain compliance system, the CSDDD places greater emphasis on social and ecological responsibility along the entire value chain. Companies must examine not only direct but also indirect partners and stand up for human rights, environmental protection and ethical behavior. In contrast to the supply chain compliance system, the CSDDD introduces civil liability and stricter sanctions, including fines of up to 5% of net sales. It also requires the termination of business relationships with non-compliant suppliers.
WHAT TO EXPECT
Timetable and Scope of the Sustainability Directive
14. March 2024:
CSDDD adopted by the EU (in a watered-down form)
Mai/June 2024:
CSDDD enters into force 20 days after its publication
Mai/June 2026:
EU states must transpose the CSDDD into national law; in Germany by adapting the LKSG
2027:
CSDDD is applicable for companies with
– more than 5,000 employees
– more than EUR 1.5 billion turnover
2028:
CSDDD is applicable for companies with
– more than 3,000 employees
– more than EUR 900 million turnover
2029:
CSDDD is applicable for companies with
– more than 1,000 employees
– more than EUR 450 million turnover
CSDDD adopted by the EU
(in a watered-down form)
May/June 2026:
EU states must transpose the CSDDD
into national law;
in Germany by adapting the LkSG
2028:
CSDDD is applicable for companies with:
– more than 3,000 employees
– more than EUR 900 million turnover
Mai/June 2024:
CSDDD enters into force 20 days
after its publication
2027:
CSDDD is applicable for companies with
– more than 5,000 employees
– more than EUR 1.5 billion turnover
2029:
CSDDD is applicable for companies with
– more than 1,000 employess
– more than EUR 450 million turnover
THE DIRECTIVE NOW IN FORCE
Adaptations and Changes in the Final Text of the Directive
In the final draft, the provisions on civil liability were adapted but remain integral to the goals of the directive. These allow trade unions and other parties to sue companies that do not comply with the regulations. However, Finland has firmly rejected this:
- Reduced scope of application: the scope of application now includes companies with 1,000 employees (instead of 500) and a turnover of at least EUR 450 million (instead of EUR 150 million)
- The high-risk sector approach was canceled: The concept of gradual inclusion of companies that do not fulfill the scope criteria but are active in high-risk sectors has been abandoned.
- Gradual application according to company size and turnover introduced.
DUE DILIGENCE OBLIGATIONS AND SCOP
Scope of Application of the EU Supply Chain Directive
The planned due diligence obligations at EU level have clear parallels to the Supply Chain Compliance Software system, particularly regarding the catalogue of obligations and the focus on risk prevention and remedial measures. One major innovation is the continuous performance of risk analyses, which means increased effort for companies.
The draft also considers situations in which negative effects cannot be remedied and stipulates that a trading relationship may only be terminated after the consequences for protected goods have been assessed. In contrast to the Supply Chain Compliance Software system, the same standard of obligation applies to all links in the supply chain, requiring a comprehensive review of the entire value chain, including downstream. However, it remains unclear whether and how customers are included in the directive.
INITIAL CONSULTATION & PRODUCT DEMONSTRATION
How can we support you?
Are you interested in our CSDDD module or our supply chain compliance system? Please write to us, our compliance experts will be happy to advise you.