EU Directive on Corporate Sustainability Due Diligence

Recently the EU released a proposal for a Directive on Corporate Sustainability Due Diligence, which includes due diligence measures for companies to identify and address adverse human rights and environmental impacts.

The new legislation aims at integrating the UN Guiding Principles on Business and Human Rights. EU companies of substantial size and economic power (500+ employees and EUR 150 million + turnover), EU companies operating in high impact sectors (250+ employees and EUR 40 million + turnover), as well as non-EU companies active in the EU  are required to prevent human rights and environmental abuses along their full value chains by carrying out Due Diligence.

These firms will have to assess their supply chains at least once a year and before major business decisions for ESG risks including forced labor, child labor, inadequate workplace safety, and environmental impacts like pollution and ecosystem degradation.

In order to conduct appropriate human rights, and environmental due diligence with respect to their operations, their subsidiaries, and their value chains, companies covered by this Directive should integrate due diligence into corporate policies and have in place a due diligence policy.

The due diligence policy should contain:

  • a description of the company’s approach to due diligence
  • a code of conduct describing the rules and principles to be followed by the company’s employees and subsidiaries
  • a description of the processes put in place to implement due diligence, including the measures taken to verify compliance with the code of conduct

Since the adoption of France’s Loi de Vigilance in 2017,  GRP has extensive experience helping companies comply with Due Diligence obligations in respect for human rights and the environment. We offer an array of due diligence services: from first-level compliance Screenings , to Enhanced Due Diligence, to our proprietary software solution Ederis™, Global Risk Profile covers ESG and AC-AML risks in line with ever-evolving regulations.

It is increasingly challenging for companies to efficiently address fraud, corruption & ESG risks arising from third-party relationships while also applying regulatory compliance, but GRP is here to help! Contact us today for your due diligence needs.