Have you ever wondered where your T-shirt, phone, or chocolate bar comes from? Every product we buy has a long journey, from raw materials to the store shelf. This journey is called a supply chain. Sometimes, along this chain, people or the environment can be harmed. In this lesson, we'll explore a new European Union rule designed to protect workers and the planet by making companies responsible for their entire supply chain.
Brief: A New Rule for Big Business (10')
On July 25, 2024, a new law called the Corporate Sustainability Due Diligence Directive (CSDDD) began in the European Union. This law requires large companies to practice "due diligence."
Due diligence means a company must actively look for, prevent, and fix human rights abuses (like child labor) and environmental damage (like pollution) in its own operations and in its supply chain. This includes suppliers who provide raw materials, factories that assemble products, and even transport companies.
Deloitte Explains the CSDDD
This video gives a brief overview of the EU's Corporate Sustainability Due Diligence Directive.
Video Transcript
Sustainability is no longer just a trend; it's a cornerstone of our modern economy. With the introduction of the Corporate Sustainability Due Diligence Directive, or CSDDD for short, the European Union is raising the bar for today's businesses. [ 00:20 ]
The main objectives and compliance obligations of the CSDDD are clear: companies have a duty to conduct due diligence in their own business operations and across their supply chains to ensure compliance with human rights and environmental standards. With this, the CSDDD not only changes existing national regulations but also has a broader scope of application. [ 00:47 ]
So when is the right time to take action? We at Deloitte say now. Getting an early start will allow you to take a proactive approach to CSDDD compliance rather than simply reacting to it once it comes into effect. We have extensive experience in sustainability due diligence, both with our clients and in our own operations, so we know what it takes to make businesses compliant. [ 01:14 ]
In our experience, navigating the CSDDD can be intimidating. We help you break it down step by step to save time, money, and stress. You can rely on our support at every stage of the process, working with you to develop tailored solutions. The sooner you complete our CSDDD readiness assessment, the quicker we can start building on the fundamentals you already have in place. [ 01:40 ]
Let us guide you through the necessary steps, draft a detailed implementation timeline, and provide clarity on the financial and human resources required. Once the regulatory requirements are clear, we can discuss the process and workflow implications of CSDDD compliance and help you translate regulatory requirements into business terms. [ 02:07 ]
In addition to using our best practice insights to answer your questions, we will give you the tools you need to make your CSDDD implementation a success. Implementing the CSDDD can be challenging. Let's work together to unlock its full potential for your business. [ 02:26 ]
Who Is Affected?
The rules apply to very large EU companies and some non-EU companies that do a lot of business in Europe. The requirements will start gradually over the next few years, beginning with the largest companies first.
The goal is to increase corporate accountability and ensure that the products sold in the EU are not made at the cost of human dignity or environmental health.
Key Vocabulary
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