EU – The EU member states voted for the revised version of the Corporate Sustainability Due Diligence Directive (CSDDD) on March 15, 2024. The EU’s aim behind the CSDDD is to oblige companies to respect human rights and environmental protection within their own business area and along the entire value chain.
The negotiators of Parliament and the EU Council had already announced on December 14, 2023 that they had come to an informal agreement about the contents of the EU Supply Chain Law. Since subsequently several states had spoken out against the previously valid text and had announced they would abstain from voting, the CSDDD was revised to secure the necessary majority.
The CSDDD comes into effect in stages between 2027 and 2029. The CSDDD only applies to corporations – and from 2027 onwards initially only to companies with over 5,000 employees and a turnover of more than 1.5 billion Euros. From 2028 onwards, also companies with more than 3,000 employees and over 900 million Euros in turnover and from 2029 onwards companies with more than 1,000 employees and a turnover of 450 million Euros are obliged to comply with the directive.
According to the CSDDD companies have to monitor their entire “chain of activities” including their upstream and downstream business partners. In the recital it is explicitly pointed out that “chain of activities” is an independent term and should not be equated with “value chain” or “supply chain”. The “chain of activities” encompasses all business partners on the supplier side related to the products manufactured by the company or the services they provide. Furthermore, it fundamentally includes all business partners, who transport, sell or store products for the company. By way of example, this could mean that for instance promotional products distributors, who sell to companies affected by the CSDDD and who take care of the fulfilment for them not only have to provide information about their suppliers and their suppliers’ suppliers, but are also obliged to provide information regarding their logistics and distributions processes.
According to the estimates of experts, significant parts of the promotional products industry will come into contact with the due diligence regulations.
