Directive on corporate sustainability due diligence approved

The European Parliament and the Council have reached an agreement on the Directive on corporate sustainability due diligence, which represents a significant step forward for the protection of the environment and human rights in the business sector.

What is the directive: The Directive on corporate sustainability due diligence is legislation designed to ensure that companies take responsibility for their environmental and social impacts throughout their value chain. It sets out clear requirements for companies to carry out risk assessments, prevent and mitigate negative impacts on the environment and human rights.

Who it affects: The directive will affect all companies operating in the European Union with more than 1,000 employees and a turnover of €450 million, as well as non-European companies operating in the European market. This includes large multinational companies, suppliers and subcontractors that play a role in the supply chain of European companies.

How it affects you: The directive stipulates that companies must conduct risk assessments to identify and address negative impacts on the environment and human rights in their operations and supply chains. They must implement measures to prevent and mitigate these impacts, as well as establish monitoring and accountability mechanisms. In addition, companies will be required to publicly report on their sustainability policies and actions.

Deadlines: When the directive enters into force, companies will have a transition period to comply with its provisions. EU Member States are expected to transpose the directive into national law within two years of its entry into force. Companies will then have an additional period to implement the required measures, with specific deadlines set for different aspects of sustainability due diligence.

The deadlines for each type of company are as follows:

• Companies with 5,000 employees and £1.5 billion in turnover will be affected in 3 years.
• Companies with 3,000 employees and £900 million in turnover will be affected in 4 years.
• Companies with more than 1,000 employees and £450 million in turnover will be affected in 5 years.

In summary, the Directive on corporate sustainability due diligence represents an important step towards a more sustainable and responsible economy, ensuring that companies operate in an ethical manner that respects the environment and human rights throughout their value chain.

How can Grup Carles help you develop your strategy?

At Grup Carles, we have extensive experience in implementing sustainability solutions and are ready to help you navigate these changes. Our team of sustainability consultants is fully up to date on how this affects you and what the deadlines are.

Our range of strategy and sustainability services comprehensively addresses how to integrate environmental, social and governance issues into core business practices.

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