Strategic Focus: Understanding The EU’s Corporate Sustainability Due Diligence Directive (CSDDD)

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Executive Summary

On July 25, 2024, the European Union’s Corporate Sustainability Due Diligence Directive (CSDDD) entered into force, ushering in an era of enhanced corporate duty to ensure long-term societal and environmental value through a firm’s operations and value chains. This report provides an overview of the directive alongside actions that organizations can undertake to prepare themselves for eventual compliance from 2027 onwards. C-Suite executives should use this report to inform their due diligence action, as part of their sustainability roadmaps, over the next two years.

Table of contents

Summary for decision-makers
The CSDDD advances the EU’s sustainability agenda by merging due diligence with environmental and social considerations

The CSDDD mandates firms know, show and improve their sustainability impacts
The CSDDD raises the bar for ESG and sustainability regulations across the world
Firms must start preparing now for eventual compliance with the CSDDD
Robust due diligence mechanisms will hold firms in good stead
Firms can leverage digital tools and external expertise to boost CSDDD preparedness

Table of figures

Figure 1. Application of the CSDDD
Figure 2. Buckets of human rights legislation
Figure 3. An overview of EU regulations
Figure 4. The CSDDD’s processes for businesses

About the authors

Priyanka Bawa

Senior Analyst
Priyanka is a Senior Analyst in the Verdantix ESG & Sustainability practice. Her current research focuses on ESG and sustainability consulting services and social aspects of ESG regulations, reporting and disclosures. Prior to joining Verdantix, Priyanka led diversity, equity and inclusion (DE&I) research in the legal and environment sectors. She holds a DPhil in Social Policy from the University of Oxford.

Kim Knickle

Research Director, ESG & Sustainability
Kimberly Knickle is Research Director of the ESG & Sustainability practice at Verdantix. Her research areas encompass ESG regulations and reporting, ESG risk, supply chain sustainability, circular economy, social impact, and sustainable finance. Kim has worked for more than 20 years in the IT industry, providing research and analysis to help companies invest wisely in new technologies. Before joining the analyst industry, she held various roles in IT services, engineering and product safety testing, beginning her career at Underwriters Laboratories, Inc. Kim holds an MBA from Boston University and a BS in Electrical Engineering from Cornell.

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