Following 45 days of negotiations, the European Council approved a watered-down version of the Corporate Sustainability Due Diligence Directive. The EU CSDDD has had a difficult journey, facing delays, changes, and hurdles to overcome. Nonetheless, the direction of travel of European governments is clear: companies need to do more to identify their exposure to unethical practices, human rights abuses, and significant adverse, across their value chain.
The directive aims to foster “sustainable and responsible corporate behavior and to anchor human rights and environmental considerations in companies’ operations and corporate governance.” The core elements of this duty are identifying, ending, preventing, mitigating, and accounting for negative human rights and environmental impacts in the company’s operations, subsidiaries, and value chains.
The most difficult problem for procurement organizations to solve will be to make sure they are ethically sourcing several tiers up their extended end-to-end supply chain. Providers of risk management solutions that can provide visibility across an n-tier supply chain in near real-time will be big winners from this directive. These include companies like Everstream AI and Exiger.
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