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Why GAN Integrity

GAN Integrity is how compliance teams get the tools and expertise to stay ahead of ESG risk. With less effort but more reach, you finally get a better way to do your good work.

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See everything – Gain a comprehensive view of the upstream and downstream ESG risks associated with your extended supply chain.

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Adapt to anything – Utilize a dynamic solution that adapts to regulatory changes and evolves with your program.

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Get all the help you need – Receive dedicated support from GAN Integrity’s team of experts.

Understanding the EU Corporate Sustainability Due Diligence Directive

csddd

The European Commission's Corporate Sustainability Due Diligence Directive (CSDDD) is a transformative piece of legislation, Adopted by the EU Parliament in Spring 2024, aimed at fostering transparency and accountability in corporate practices concerning environmental, social, and governance (ESG) issues. The directive mandates that companies integrate sustainability into their core strategies and operations, thus ensuring long-term resilience and societal impact. The directive introduces stringent disclosure obligations, requiring companies to provide detailed reports on their environmental performance, social impact, and governance structures. 

For sustainability and compliance officers, the directive signifies a shift towards proactive management of ESG issues rather than reactive reporting. Companies are expected to assess risks across their entire value chain and implement procedures to address identified risks.

Timelines for Compliance With The CSDDD

Adopted by the EU Parliament in Spring 2024, the CSDDD provides a two-year period for EU member states to transpose it into national law. Companies falling under different thresholds will have varying timelines to comply. 

2027

Three years after the enforcement of the directive Group I will be expected to be compliant with its requirements  

2028

Companies in Group II are granted an additional year before they are held accountable to the directive’s requirements. 

2029

Companies in Group III will be granted a five-year timeline within which they will need to become compliant with the Directive. 

States are required to impose penalties on companies that breach the Directive, including financial penalties of at least 5% of the company's worldwide net turnover. Certain breaches of CSDDD obligations can also lead to civil liability for damages. However, companies cannot be held liable for damages caused by their business partners within their supply chain.

Key Requirements of The EU Corporate Sustainability Due Diligence Directive

Under the EU Corporate Sustainability Due Diligence Directive (CSDDD), in-scope companies will be expected to take several significant actions to ensure compliance. These include:

Conduct Due Diligence: Companies must identify, prevent, mitigate, and account for adverse human rights and environmental impacts in their operations, subsidiaries, and value chains.

Adopt a Due Diligence Policy: This policy must outline the company's approach to due diligence and be updated annually. It should include a code of conduct for employees and subsidiaries, as well as processes for implementing due diligence.

Assess Actual and Potential Adverse Impacts: Regularly monitor and assess actual and potential adverse human rights and environmental impacts associated with the company's activities and those of its business relationships.

Take Action to Prevent or Mitigate Impacts: Implement appropriate measures to prevent or mitigate identified adverse impacts. This could include changing business practices, working with business partners to address issues, and investing in solutions to reduce harm.

Establish a Complaints Mechanism: Set up a mechanism that allows affected individuals and communities to raise concerns about adverse impacts. This mechanism should be accessible and transparent.

Monitor the Effectiveness of Policies and Measures: Continuously monitor the effectiveness of the due diligence policies and measures, making adjustments as necessary to ensure they remain effective.

Report on Due Diligence: Provide public reports on due diligence efforts, including the identified impacts, actions taken, and the effectiveness of those actions. These reports should be accessible and understandable to stakeholders.

Integrate Due Diligence into Corporate Governance: Ensure that due diligence processes are integrated into corporate governance and decision-making processes, with oversight from the company’s board of directors.

GAN Integrity for the EU Corporate Sustainability Due Diligence Directive

GAN Integrity’s platform is designed to support companies in maintaining robust ESG compliance programs that meet CSDDD requirements.

Third-Party Risk Management Supply Chain Due Diligence Policy Management Disclosure Management Reporting and Documentation

Third-Party Risk Management

Manage risks associated with third parties and assess these against relevant laws and organizational standards. Capabilities include:

  • Lifecycle management:  Automated workflows for onboarding, risk assessment, issue management, monitoring and off-boarding.
  • Integrated due diligence: Initial and ongoing screening of third parties for sanctions, adverse media, forced labor, ESG and more.
  • Reporting and analytics: Executive dashboards and reports: Consolidate third party data to identify risks and potential exposure to your organization.
Learn more
GAN Integrity Third Party Risk Management

Recent Resources

Reference

EU Corporate Sustainability Due Diligence Directive | GAN Integrity

An introduction to the EU Corporate Sustainability Due Diligence Directive (“CSDDD”) Regulation of global supply chains is increasingly a primary weapon in

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Webinars

Growing Imperative for Third-Party & Supply Chain Compliance | GAN

CS3D and LkSG have or will effect how companies with operations in the EU are held accountable for human and ESG violations.

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Blog

The EU Corporate Sustainability Due Diligence Directive | GAN

Understanding the EU Corporate Sustainability Due Diligence Directive (CS3D) and its impact on businesses' human rights and environmental responsibilities.

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Frequently Asked Questions

What is the difference between CSRD and CSDDD?
The Corporate Sustainability Due Diligence Directive (CSDDD) focuses on mandating companies to integrate sustainability into their core strategies and operations, requiring them to assess and address ESG risks across their entire value chain. In contrast, the Corporate Sustainability Reporting Directive (CSRD) primarily emphasizes the disclosure and reporting aspects of sustainability, requiring companies to provide detailed reports on their environmental performance, social impact, and governance structures.
The Corporate Sustainability Due Diligence Directive (CSDDD) requires companies to integrate sustainability into their core strategies and operations, mandating the assessment of risks across their entire value chain and the implementation of procedures to address identified risks. Companies are expected to provide detailed reports on their environmental performance, social impact, and governance structures, signifying a shift towards proactive management of environmental, social, governance (ESG) issues rather than reactive reporting.
The Corporate Sustainability Due Diligence Directive (CSDDD), adopted by the EU Parliament in Spring 2024, aims to foster transparency and accountability in corporate practices concerning environmental, social, and governance (ESG) issues. The directive mandates that companies integrate sustainability into their core strategies and operations, requiring them to provide detailed reports on their environmental performance, social impact, and governance structures, while also assessing risks across their entire value chain and implementing procedures to address identified risks.
The Corporate Sustainability Due Diligence Directive (CSDDD) applies to large EU-based companies with about 1,000 employees and a net worldwide turnover of €450 million. Additionally, the directive extends to non-EU companies operating within the EU that meet similar turnover thresholds, with the revenue being generated in the EU, regardless of whether they have a branch or subsidiary in the region,
The Corporate Sustainability Due Diligence Directive (CSDDD) was adopted by the EU Parliament in Spring 2024, marking a significant step towards fostering transparency and accountability in corporate practices concerning environmental, social, and governance (ESG) issues. This transformative legislation mandates that companies integrate sustainability into their core strategies and operations, ensuring long-term resilience and societal impact while introducing stringent disclosure obligations.

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