European Commission’s Directive on Corporate Sustainability Due Diligence

Yesterday, the European Commission adopted a long-awaited Proposal for a Directive on Corporate Sustainability Due Diligence. It aims to “set out a horizontal framework to foster the contribution of businesses operating in the single market to the respect of the human rights and environment in their own operations and through their value chains, by identifying, preventing, mitigating and accounting for their adverse human rights, and environmental impacts, and having adequate governance, management systems and measures in place to this end”. Importantly, the proposal covers the company’s own operations, their subsidiaries and their value chains (indirect and direct business relationships). It covers large companies (500 employees, €150 million net turnover worldwide) and additional companies operating in defined high impact sectors. I am sure many supply chain managers, not just in Europe, will have the 70-page document on their nightstand as required reading for the next few days.