The Corporate Sustainability Due Diligence Directive (CS3D)
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What is the Corporate Sustainability Due Diligence Directive (CS3D)?
The CS3D, or Corporate Sustainability Due Diligence Directive, is a proposed European Union directive that would require companies to conduct due diligence on their supply chains to identify and mitigate potential human rights and environmental impacts. The directive is still in the early stages of development, but it is going to have a significant impact on businesses operating in the EU.
Explore CD3D and its Requirements while Gaining Tips on how to Prepare
Who does it apply to?
The CS3D would apply to companies with more than 500 employees and a turnover of more than €150 million, or €40 million if they are listed on a stock exchange. The directive would also apply to companies that have a significant impact on human rights or the environment, even if they do not meet the size or turnover thresholds.
The CS3D is a significant step forward in the EU’s efforts to promote corporate sustainability. The directive would require companies to take responsibility for their impact on human rights and the environment, and it would give stakeholders a stronger voice in holding companies accountable. The CS3D is still in the early stages of development, but it is expected to be finalised in 2023. Once the directive is finalised, companies will have two years to comply.
What is required from companies?
- Identify actual or potential adverse human rights and environmental impacts in their operations and supply chains.
- Prevent or mitigate potential impacts.
- Bring to an end or minimise actual impacts.
- Establish and maintain a complaints procedure.
- Monitor the effectiveness of the due diligence policy and measures.
- Publicly communicate on due diligence.
The CS3D is a significant challenge for businesses, but it is also an opportunity to demonstrate their commitment to corporate sustainability. By taking the necessary steps to comply with the directive, companies can show that they are taking responsibility for their impact on human rights and the environment.
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