European Commission Adopts Corporate Sustainability Due Diligence Directive That Will Impact Many U.S. Companies
Directive on Corporate Sustainability Due Diligence (CSDD)
This is our third blog post on a groundbreaking legal regime that is being enacted in the European Union presently called Corporate Sustainability Due Diligence (CSDD). It was previously called Mandatory Due Diligence (MDD). On February 23, 2022, the European Commission adopted a Proposal for a Directive on Corporate Sustainability Due Diligence (CSDD) that addresses social and environmental concerns, including global warming. If, as expected, the proposed directive is enacted by the European Parliament and the European Council, it will require all 27 member states of the EU to enact laws consistent with the directive. When that happens, global commerce as we have known it for centuries will enter a new era. CSDD goes beyond the supply chain to deal with a company’s “value chain”, which is defined very expansively to mean activities related to the development, production and providing of goods and services, the use and disposal of products, and the related activities of upstream and downstream businesses. As presently drafted, CSDD will directly or indirectly affect a large number of companies around the world, including American companies.