Sustainability Due Diligence Enters A New Era, As Regulation, Risk And Technology Converge

Regulatory developments over the past few months illustrate a clear global trend: governments are moving beyond transparency-focused reporting requirements towards more stringent expectations around risk identification, prevention and remediation across value chains. Beyond compliance, due diligence is viewed as a strategic capability that helps firms navigate regulatory complexity, geopolitical uncertainty and supply chain risk, while protecting market access, strengthening resilience and creating value.

While the EU's Omnibus package reduced the scope of the Corporate Sustainability Due Diligence Directive (CSDDD) by roughly 70% and delayed implementation until 2028, the underlying direction has not changed. Approximately 2,900 firms are still required to establish risk-based due diligence processes across their value chains.

Globally, expectations continue to grow, with:

• The UK advancing deforestation-related due diligence requirements.
• Switzerland strengthening sustainability reporting and due diligence obligations.
• Canada introducing stricter legislation targeting products linked to forced labour.
• Australia proposing reforms to its Modern Slavery Act, with potential civil and criminal liability for firms that fail to prevent modern slavery in their operations and supply chains.

The regulatory message is clear: businesses must proactively manage sustainability risks, rather than simply disclose them.

Due diligence is a market access requirement

Firms must navigate a growing web of due diligence requirements, covering modern slavery, forced labour, deforestation and product traceability. Regulations such as the EU Deforestation Regulation (EUDR), the US Uyghur Forced Labor Prevention Act (UFLPA) and the forthcoming EU Forced Labour Regulation increasingly make due diligence a prerequisite for access to key markets.

As due diligence evolves beyond sustainability compliance to become a factor in trade competitiveness, tariff exposure and market access, visibility across supplier networks has become a strategic asset. Firms with stronger due diligence capabilities can verify origin claims, identify alternative suppliers and assess exposure to tariffs, sanctions and import restrictions before disruption occurs.

Technology enables scalable due diligence

Traditional audits and spreadsheet-based assessments cannot provide the visibility and speed required to manage evolving risks across complex supply chains.

As a result, organizations are adopting services and platforms, such as SMETA audits and SEDEX, that combine traceability, supplier intelligence, risk monitoring and AI-driven analytics. Recent software developments that support sustainability due diligence include new products from vendors, such as:

• TrusTrace’s human rights and environmental due diligence questionnaire, aimed at streamlining compliance for the apparel and footwear sector.
• Upright’s AI-powered sustainability due diligence tool, enabling investors to model sustainability, risks and opportunities.
• ClimeFi’s Due Diligence Coverage platform, allowing qualified buyers to access its carbon removal project assessments database.
• Novata’s private markets ESG Due Diligence solution, streamlining sustainability data collection and management for pre-investment workflows and post-deal monitoring.
• RepRisk offering thematic Due Diligence Scores that assess biodiversity, human rights and environmental performance risks on a 0-100 scale.

Organizations that leverage hybrid digital services models to embed sustainability due diligence within procurement, supply chain, risk and investment functions will be better-positioned to navigate regulatory complexity, maintain market access and strengthen resilience. Read the following Verdantix reports to learn more:

Buyer’s Guide: Sustainability Assurance And Due Diligence Services (2026)

Market Trends: Product-Level Sustainability Verification