KPMG: Stricter rules are coming in the area of sustainability and human rights

By: Trademagazin Date: 2024. 07. 05. 12:30

The European Union directive on corporate due diligence related to sustainability, i.e. the Corporate Sustainability Due Diligence Directive (CSDDD), has been published, which member states must transpose into their national legislation within two years.

The tasks of the companies will also include the management of adverse effects on human rights and environmental protection, the operation of a complaint handling system, and the preparation of a transition plan aimed at mitigating climate change. In addition to obligations, the regulation can also create opportunities through the conscious vetting of the supply chain and the provision of induced improvements. Screened SMEs can even receive targeted support to ensure compliance with company expectations.

Pursuant to the directive, large companies in the European Union and third countries that meet certain thresholds based on the number of employees and the achieved annual net sales must prepare a sustainability due diligence and a transition plan aimed at mitigating climate change.

Large European Union companies with an annual net global sales of more than EUR 450 million and employing more than 1,000 employees (even at the company group level), as well as companies cooperating under franchise or license agreements under certain conditions, will be obliged. Third-country companies will be obliged if they achieve more than 450 million euros in annual net sales in the European Union.