Europe going full speed on mandatory due diligence law!!

It seems as if we might expect the adoption of the European Union's Corporate Sustainability Due Diligence (CSDD) directive end of November, to be precise on November 28th..

It follows a vote by the European Parliament in which 525 members voted in favour and 60 voted against, with 28 abstentions, on the mandatory due diligence directive which will apply to around 50,000 companies.

As known the CSDD should place more responsibility for human rights and environmental topics to the sourcing companies in their global supply chains.

The EU proposal goes further than the German Supply Chain Act , also known as the “Lieferkettengesetz”, some of the main differences as follows:

a) Companies, with 500 and 250 employees, respectively, fall under the CSDD. The German law only applies to companies with more than 3,000 employees (and more than 1,000 employees from 2024).

b) The EU directive requires companies to consider the entire supply chain as users and disposers of products and not only the direct suppliers as is the case with the German law. (Note: recent comments from the BAFA indicate, that they will also be looking beyond Tier 1)

c) The new EU regulation includes possible civil liability for company directors, so that those affected can sue for damages in European courts.