Understanding CSDDD - Corporate Sustainability Due Diligence Directive

Summary

The Corporate Sustainability Due Diligence (CSDD) Directive mandates European companies to ensure environmental and human rights protection across their supply chains. It applies to large companies and will progressively extend to smaller enterprises. Businesses must understand legal requirements, data, and supply chain details before selecting software to automate compliance tasks. The O sapiens Hub offers a solution to manage these requirements, automating risk analysis, supplier questionnaires, compliance reports, and connecting with existing systems. The directive presents both challenges and opportunities, encouraging businesses to operate more sustainably while meeting legal obligations.

Takeaways

• 😀 The Corporate Sustainability Due Diligence (CSDD) Directive aims to promote the protection of the environment and human rights in both the EU and globally.
• 😀 The directive establishes transparency by regulating the supply chains of European companies, covering upstream partners, suppliers, and downstream activities like distribution and recycling.
• 😀 The CSDD will apply to 5,500 very large companies with over €450 million in worldwide turnover and more than 1,000 employees.
• 😀 Compliance with the CSDD may qualify as a criterion for winning public contracts and concessions.
• 😀 The provisional agreement of the CSDD needs to be formally approved by the European Parliament, with a two-year timeframe for member states to transpose it into national law.
• 😀 The CSDD is expected to apply to large companies starting in 2027, and its scope will expand to small and medium enterprises (SMEs) in 2028 and 2029.
• 😀 Companies are now required to ensure their entire supply chain is sustainable, creating both challenges and opportunities for the future.
• 😀 The first step for companies is to understand the requirements of the CSDD in detail, followed by gaining insights into their master data and supply chain before selecting software solutions.
• 😀 There are three main challenges for companies: compliance with the law, automation of processes, and adapting to new process-driven workflows.
• 😀 The O Sapiens Hub for CSDD provides a solution to implement the requirements digitally, automatically, and in a legally compliant way, offering tools for risk analysis, supplier communication, and compliance reporting.

Q & A

What is the primary aim of the Corporate Sustainability Due Diligence (CSDD) Directive?

The primary aim of the CSDD Directive is to promote the protection of the environment and human rights within the European Union and globally by regulating the supply chains of European companies.

Which companies are directly impacted by the CSDD Directive?

The CSDD Directive applies to very large companies with over 450 million euros in worldwide turnover and more than 1,000 employees, affecting around 5,500 such companies.

What are the key obligations of companies under the CSDD Directive?

Companies are required to ensure transparency by regulating both their own operations and those carried out by their business chain, including upstream suppliers and downstream activities like distribution and recycling.

How will the CSDD Directive affect the awarding of public contracts?

Compliance with the CSDD Directive will be considered a criterion for awarding public contracts and concessions, creating an incentive for companies to align with sustainability standards.

What is the timeline for the implementation of the CSDD Directive?

The CSDD Directive will apply from 2027 to large companies, with a gradual expansion to small and medium-sized enterprises (SMEs) in 2028 and 2029.

What are the challenges faced by companies under the CSDD Directive?

Companies face challenges including ensuring compliance with the directive, automating processes to meet new requirements, and adapting to new, process-driven workflows.

Why is software selection important for companies complying with the CSDD Directive?

Software helps companies automate due diligence processes, ensuring they can comply with the directive efficiently. It's essential to first understand the requirements and existing data before choosing the appropriate software.

What role does automation play in the CSDD Directive compliance process?

Automation helps companies fulfill the new requirements by reducing repetitive tasks, increasing productivity, and ensuring that due diligence processes are carried out accurately and efficiently.

How does the O sapiens hub assist companies with CSDD compliance?

The O sapiens hub automates key processes such as initial and annual risk analysis, gathering product-related information through AI-driven questionnaires, and generating compliance reports. It also helps connect existing systems and import necessary data.

What are some benefits of using the O sapiens hub for CSDD compliance?

The O sapiens hub provides a 360° view of supplier data, automates workflows, identifies trends, patterns, and vulnerabilities, and helps ensure legal compliance with the CSDD Directive.