4 June 2024
There has been big news for corporate accountability this month: the Corporate Sustainability Due Diligence Directive (CSDDD) has been officially adopted by the Council of the European Union.
After four years of long and hard negotiations between European Institutions, on 24th May 2024 the Directive was officially adopted in EU Law. Following its publication in the Official Journal of the EU, Member States will then have two years to transpose the new rules into their national law.
What is the CSDDD?
The CSDDD (or CS3D as its sometimes called) can be thought of as the social and human rights arm of the Corporate Sustainability Reporting Directive (CSRD). As well as reporting under the CSRD, companies operating in the European Union will now be required to provide more detailed and comprehensive information on their due diligence processes, as well as their climate transition plans.
With the central aim to prevent human rights abuses and environmental degradation, the CSDDD will force companies to better examine their supply chain and production practices. In doing so, it will set a global benchmark for global corporate responsibility.
Who will it affect?
Adopting a phase-in approach, the Directive will initially apply to all European companies with 5000 employees and €1500 million in turnover globally, as well as non-European companies that register €1500 million within the EU. These thresholds will decrease for 2028 and 2029, as the Directive gradually expands its scope to include more and more companies.
The CSDDD will only apply to companies that have met the relevant thresholds for two consecutive years.
Longevity Partners will closely be tracking the implementation of this Directive at the national level, as Member States are permitted to bring additional companies into scope sooner, as well as introducing more stringent requirements.
How can Longevity help?
Longevity Partners are expertly positioned to help you prepare for forthcoming CSDDD requirements. From supporting you in developing a Due Diligence Framework that aligns with international frameworks and standards, to diving deeper through a Social Impacts, Risks and Opportunities (IROs) Assessment, our Social Impact team are well equipped to equip you with a more holistic approach to corporate responsibility across the value chain. Reach out to our head of Social Value, Kanon Tsuda to learn more about how Longevity Partners can support your team align with the CSDDD today.