In February 2022, the European Commission published legislative proposal of the new directive on due diligence for business sustainability (CSDDD). The CSDDD aims to reduce the risk of adverse impacts on human rights and the environment arising within global value chains by setting new requirements for how companies must conduct due diligence across their operations and value chains.

• The Corporate Sustainability Due Diligence Directive (CSDDD) is a major piece of EU legislation that will require EU and non-EU companies to carry out environmental and human rights due diligence across their operations, subsidiaries and value chains.
• Under the proposed rules, companies will have to identify potential and actual adverse environmental and human rights impacts arising from their own operations, subsidiaries and business relationships. Companies must take steps to prevent or mitigate potential impacts they identify, as well as to end or minimize any actual impacts. If companies fail to comply and damage occurs as a result, they can be held liable and face financial penalties.
• The CSDDD will also be the first EU legislation to require companies to adopt a climate change plan. The requirements are expected to comply with the EU CSRD and accompanying standards.
• EU legislators are currently negotiating the final text of the CSDDD in trilogues and are expected to reach an agreement in early 2024. While we await clarification on certain areas of the directive, companies can start preparing their regulatory responses by accepting some "no regrets". measures to speed up their preparations. These include mapping existing due diligence policies, mapping the value chain and identifying business partners.

(Ruth Kilsbyová, Magda Puzniaková, more at deloitte.com)