EU Corporate Sustainability Due Diligence Directive: 79% of companies are confident that compliance is achievable

The EU Supply Chain Act has now been adopted with some amendments to the original draft, providing clarity for those companies impacted. A study conducted by INVERTO, a Boston Consulting Group subsidiary specialising in procurement and supply chain management, reveals optimism among French and German companies about their readiness for compliance. Many have already started to implement the due diligence guidelines.

The importance of enhancing supply chains' environmental and social impact is a priority for nearly three-quarters of companies surveyed by INVERTO.

77% of companies consider the EU Corporate Sustainability Due Diligence Directive (CSDDD) as an opportunity to show greater respect for human rights and the environment.

79% of companies surveyed believe that compliance with the directive is achievable. In contrast, 23% primarily see the new regulation as a risk because companies outside the EU do not have to comply with the obligations.

The majority of respondents have already taken steps to comply with the CSDDD. These include, for example, the development of compliance procedures (77%), the communication of an annual financial report (76%), the introduction of supplier selection criteria and standards for their collaboration (75%), and performance indicator monitoring (74%).

Nearly 70% of those surveyed are aware that this new European directive will entail costs, but most estimate that these will be minimal or moderate. In the long term, seven out of ten businesses think that the financial impact will be positive and that they can expect a return on investment.

Implementation challenges

Many of the study participants are sceptical when it comes to implementing the measures: Two out of three companies say they face challenges. These obstacles include a lack of transparency and access to data (28%), insufficient personnel capacity (24%) or difficulties in operationalising the strategy (23%). Over 30% of respondents would also like to see better training for those who have to put the guidelines into practice.

Just 43% state that they already fully comply with their respective national due diligence laws. Even fewer - 34% - already comply with the stricter European rules. Beyond the financial aspect, many of those surveyed also expect positive results from the introduction of the legislation: For example, stricter regulations could have positive consequences for their image (60%), and respect for human rights (55%). Other important reasons to implement measures include the ability to attract talent (52%), and greater respect for the environment (52%).

"To succeed in complying with the CSDDD, it is essential for companies to train their employees in the requirements of the new regulation. This is a need expressed by nearly half of the respondents. Leaders must also adopt a cross-cutting approach and integrate the duty of vigilance into a corporate program that effectively combines cost control, ESG commitment, and increased resilience. The CSDDD should be approached as a performance issue rather than a compliance issue," says Jean-Pierre Masson, Principal at INVERTO.