Negotiators from the European Parliament and Council have agreed on new due diligence rules for companies to protect human rights and the environment. This means that the European supply chain law CSDDD (short for Corporate Sustainability Due Diligence Directive) is just around the corner and the approval of the member states is considered a formality.

The CSDDD goes beyond the Supply Chain Due Diligence Act (LkSG) that has been in force in Germany since January 2023. Companies with more than 500 employees and a global turnover of more than 150 million euros are to be covered by the law (the LkSG initially applied to companies with more than 3,000 employees, then from January 2024 also to companies with more than 1,000 employees). For companies in high-risk sectors (including the production and wholesale of textiles, clothing and footwear, agriculture and fishing, food production, extraction and wholesale of mineral raw materials), the obligations are to apply from 250 employees and a turnover of more than 40 million euros.

The companies concerned are to be obliged to identify sustainability risks, take preventative measures and investigate any breaches of human rights regulations, for example, and take remedial action where necessary. In addition, the business models should be compatible with the Paris Agreement on climate protection.

The member states are to task supervisory authorities with monitoring compliance with the CSDDD. Fines can also be imposed and companies affected can be publicly named. In contrast to the LkSG, civil actions can also be brought against companies at European level in the event of violations.

You can find the notification from the European Parliament here.

Do you or your employees need appropriate training? You can find the next training dates here.

Do you need advice and support to implement the Supply Chain Act and the resulting due diligence obligations? Then you can rely on our expertise. Simply make an appointment for a free initial consultation.