Q&A: New EU sustainability laws (CSDDD)

Breakline

Doing good & right. The European Union is one step further in adopting laws that hold large companies responsible for the sustainability of their supply chain. Last month, the European Commission finalised the Corporate Sustainability Due Diligence Directive (CSDDD). What does it entail?  Impact steward, and supply chain expert, Tim van Rees brings us up to speed.

What is the CSDDD? 

The directive will cover all companies with over 1,000 employees and a global turnover exceeding 450 million euros. They are tasked with oversight activities across their value chains, both within and beyond Europe, focussing on fostering environmental stewardship and upholding social responsibility. If companies are not diligent in screening for and preventing malpractices, they could face regulatory sanctions or – even – civil lawsuits. 

What is the idea behind this directive?

The aim is to anchor human rights and environmental considerations in companies’ operations and corporate governance. Many European countries already have national laws in place, but they vary from country to country. This European directive is set to create a level playing field for all companies operating in the EU. 

“Many life sciences companies will be subject to the directive”

Tim van Rees, Impact Steward

How will this affect companies in the health sector? 

Many life sciences companies will be subject to the directive, even if headquartered outside of the EU. This means they need to (further) elevate their sustainability standards. While these firms typically maintain robust checks and balances, the CSDDD will reinforce their obligations in the field of social responsibility. It’s worth noting that healthcare providers, such as hospitals and care facilities, are not foreseen to be affected.

When will it take effect? 

The directive needs to be approved in the European Parliament, first. it is expected to be on the agenda in April. After that, national parliaments are to adopt the directive in national laws. 

Did you know we have set up a sustainable supply chain benchmark for life sciences companies? Reach out to Tim for more information. 

Curious what we can do for you?

Marileen Kan

Marketing & Communications Manager

Marketing & Communications Manager

marileen.kan@impactstewards.com