Corporate Sustainability Due Diligence Directive (CSDDD)

What is CSDDD (Corporate Sustainability Due Diligence Directive)?

Corporate Sustainability Due Diligence Directive (CSDDD), is a regulation proposed by the European Union that requires companies to act more responsibly in terms of sustainability in their supply chains and business operations. The main purpose of this directive is to ensure that companies take an active responsibility to prevent negative impacts on human rights and the environment and to ensure that risks in these areas are identified and managed in advance.

CSDDD does not limit sustainability to the company’s internal processes, but also includes all business partners (direct and indirect) throughout the supply chain. This approach brings a broader sense of responsibility and accountability in the business world.

Main Objectives of CSDDD

• Respect for Human Rights: It requires companies to respect and prevent violations of labour and human rights, both in their own operations and in their supply chains.
• Management of Environmental Impacts: Companies are ensured to fulfill their responsibilities to reduce their negative impact on the environment, combat climate change and protect biodiversity.
• Supply Chain Transparency: It is mandatory to assess and manage environmental and social risks at every stage of the supply chain.
• Responsibilities for Managers: It contains provisions that require company managers to make decisions taking into account sustainability and long-term impacts.

Scope of Application of CSDDD

The CSDDD primarily applies to large companies and businesses operating in specific sectors. However, companies falling within the scope of this directive will also have an indirect impact on smaller businesses in their supply chains. Companies are responsible for ensuring that all business partners in their supply chain comply with the requirements of the CSDDD.

Effects and Advantages of CSDDD

• Sustainable Business Models: CSDDD encourages companies to transition to more sustainable and socially responsible business models.
• Legal Compliance: Companies that do not comply with the directive’s requirements could face serious sanctions, so complying early will give businesses a competitive advantage.
• Protection of Brand Reputation: A business model that does not harm human rights and the environment strengthens the brand's reputation and increases customer trust.