Due Diligence: An ongoing, proactive, and reactive process through which companies put in place systems and processes to make sure they can identify, manage, and report on risks in their supply chain.
The Council and the European Parliament have reached a provisional deal on the corporate sustainability due diligence directive (CSDDD), which aims to enhance the protection of the environment and human rights in the EU and globally.
The due diligence directive will set obligations for large companies regarding actual and potential adverse impacts on human rights and the environment, concerning their operations, those of their subsidiaries, and those carried out by their business partners.
For companies that fail to pay fines imposed on them in the event of a violation of the directive, the provisional agreement includes several injunction measures and takes into consideration the turnover of the company to impose pecuniary penalties (i.e. a minimum maximum of 5% of the company’s net turnover).
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