Summary:
The Corporate Sustainability Due Diligence Directive (CSDDD) requires large companies to exercise due diligence across their entire value chain to prevent potential adverse human rights and impacts on the environment. As the guardian of the supply chain, the procurement function plays a key role in ensuring corporate compliance.
Contents:
- What is the CSDDD Directive?
- Who is covered by the CSDDD?
- What is the CSDDD timeline?
- What role does procurement play in implementing the CSDDD?
The CSDDD (Corporate Sustainability Due Diligence Directive) introduces the concept of due diligence at European level for the first time. It requires large companies to integrate due diligence regarding human rights and environmental protection. Taken effect on 24 April 2024 by the European Parliament and entered into application on 25 July 2024, this directive marks a major milestone in the sustainable transformation of businesses. It requires the deployment of control mechanisms and the integration of responsible practices at the heart of operations, particularly within the supply chain.
What is the CSDDD Directive?
The CSDDD, or CS3D, is an EU directive that imposes a due diligence duty on companies’ value chains concerning human rights and the environment.
It aims to encourage sustainable and responsible practices within their value chain. To achieve this, it establishes clear requirements for companies to take into account negative social and environmental impacts at the heart of their operations.
To achieve compliance, companies must identify these adverse impacts, whether actual or potential, and take appropriate measures. This involves examining the activities of their subsidiaries, in addition to their suppliers and their business partners. Once they have identified these risks or adverse impacts, they are then required to prevent, mitigate or even put an end to these adverse impacts. This involves regular risk assessment and the deployment of a due diligence plan.
This directive follows on from legislation already in force in several member states. In France, Law No. 2017-399 has imposed a duty of vigilance since 2017, while Germany adopted the LkSG (Lieferkettensorgfaltspflichtengesetz) law in 2021. Similar initiatives can also be observed outside the European Union: in the United Kingdom with the Modern Slavery Act (2015) and in the United States with the Uyghur Forced Labor Prevention Act (2021).
CSDDD and CSRD: what is the connection?
The CSDDD and the CSRD (Corporate Sustainability Reporting Directive) are two European Union directives that reinforce each other. Whilst the former establishes due diligence obligations and standards for companies, the latter imposes and regulates extra-financial sustainability reporting. These two pieces of legislation work in tandem, with a common objective: to encourage transparency within businesses.
Who is covered by the CSDDD?
This directive applies to large companies operating within the European Union. However, its scope was revised following the “Omnibus 1” directive voted by the European Parliament on 16 December 2025. The press release published by the Council of the European Union following the adoption of this regulation recalls that the proposal “reduces complexity and unnecessary obstacles, lightens administrative burdens, improves efficiency and introduces greater flexibility for businesses that remain subject to it.”
Two types of companies are covered:
- European companies employing more than 5,000 employees and with an annual net turnover exceeding €1.5 billion worldwide;
- Non-EU companies provided they generate at least €1.5 billion within the European Union.
This refocusing significantly reduces the number of companies concerned (compared to the initial scope). This aims to focus efforts on multinationals which, due to their resources and influence, are in a position to lead the way and induce systemic change.
What is the CSDDD timeline?
Initially, the directive must be transposed into the law of member states by 26 July 2028. Then, all companies concerned must comply by 26 July 2029.
The previous gradual deployment planned between 2027 and 2029 according to company size has been replaced by a single deadline following Omnibus 1, thus simplifying the application framework.
What role does procurement play in implementing the CSDDD?
Because it is the guardian of the supply chain, the procurement function is at the heart of the due diligence process established by the CSDDD. To achieve compliance, procurement departments must rethink their approach to procurement, as well as supplier management and risk management.
Assessing and mapping supplier risks
The first step is to put in place robust processes to identify, analyse and prioritise risks within the supply chain. A significant challenge for multinationals which often have thousands, or even tens of thousands, of suppliers. This is why technology plays a key role here.
This is explained by Tracy Nilsson, Global Sustainability Executive at Novo Nordisk: “It will provide us with automated risk analysis, enabling us to conduct our due diligence to assess, manage, prioritise and mitigate risks in our value chain. This can be done through various options, including self-assessment questionnaires, certifications, evidence, sector monitoring, etc. This will therefore give us a 360° overview of our value chain.”
This approach must be carried out in collaboration with legal, compliance and sustainable development teams to ensure a holistic and harmonised approach to due diligence.
Rethinking processes and creating an action plan
Once risks have been identified, the next step is to implement a digital transition plan, in the short, medium and long term. This involves rethinking procurement processes and implementing targeted actions based on the identified risks.
Procurement departments will, for example:
- Define ESG criteria in supplier selection and evaluation;
- Create or update the supplier code of conduct;
- Integrate specific clauses into tenders and specifications;
- Establish contractual guarantees with suppliers;
- Deploy responsible sourcing charters;
- Train procurement teams on CSDDD challenges;
- Etc.
The CSDDD represents a strategic opportunity for companies to strengthen their resilience, their reputation and their overall performance. One thing is certain: companies that anticipate this regulation and structure their responsible procurement policy today will be better equipped for the future.
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Manutan, your responsible sourcing partner
The Manutan Group supports companies in optimising their sustainable procurement strategy. Thanks to our Savin’side® method, we are able to identify your areas for improvement, propose progress plans and help you implement them, with an agile approach.
