Europe I hear you say? Well, that’s not us anymore, right? Erm, well, it’s never that simple is it?

It was proposed by the European Commission in February 2022 and is currently in the process of being negotiated by the European Parliament and the Council of the European Union. It is expected to be agreed early to mid-2024.

What will it mean then?

The CS3D would require companies with an EU footprint (whether based in Europe or providing goods or services into the EU) to take steps to identify, prevent, mitigate, and account for actual and potential adverse human rights and environmental impacts throughout their global value chains.

This bit is important – this would include the operations of subsidiaries, business partners, and suppliers.

The CS3D would also require companies to establish a due diligence process, which would include the following steps:

• Identifying and assessing risks: Companies would need to identify and assess the actual and potential adverse human rights and environmental impacts that their business activities may have.
• Taking preventive measures: Companies would need to take measures to prevent or mitigate the identified risks.
• Monitoring and reporting: Companies would need to monitor the effectiveness of their due diligence process and report on their progress to the relevant authorities.

The CS3D is a major step forward in the EU’s efforts to promote corporate sustainability and responsibility. It is expected to have a significant impact on businesses across the globe, as companies will need to adapt their operations to comply with the new requirements.

The key objectives of the CS3D are:

• To protect human rights and the environment
• To promote responsible business conduct
• To level the playing field for businesses
• To increase transparency and accountability

The CS3D is still under development however the advice is that businesses should start preparing for the CS3D now by:

1. Assessing their current due diligence practices
2. Identifying any gaps in their due diligence processes
3. Developing a plan to address any gaps
4. Monitoring developments in the EU

By taking these steps, businesses can ensure that they are prepared to comply with the CS3D once it comes into force.

What does that mean for me?

How do you know you are dealing with a responsible supplier?

How can you show you promote responsible business conduct?

How can you demonstrate transparency and accountability?

If you fancy a cup of coffee to discuss a great way to do all the above then please get in touch.

I hope you found this useful. Please follow my page on LinkedIn here.

Lindsey