The European Union keeps advancing on responsible business practices with two key directives: the #CSDDD (Corporate Sustainability Due Diligence Directive) and the #CSRD (Corporate Sustainability Reporting Directive). While they have different approaches, they work together to encourage companies to think and act more sustainably throughout their operations.
CSDDD vs. CSRD: What’s the Difference?
Imagine the CSDDD as your company’s GPS for sustainability. It tells you where to look for potential harm to people and the planet across your supply chain. The CSRD, the other hand, is like your sustainability report card. It requires specific reporting on your environmental, social, and governance performance.
Dive into the essence of the CSDDD with these 5 key insights:
1. Scope
Imagine a net cast wide over the corporate world, capturing 13,000 European and 4,000 non-European companies. From 2026, European companies with more than 500 full-time employees and over €150 million in turnover.
2. Obligations
Unlike the CSRD’s call for stories of sustainability, the CSDDD demands action. Companies must develop plans, searching for any harm their operations might cause to people or the planet. They Align their business strategy intending to align with the 1.5°C target of the #ParisAgreement.
3. Sanctions
Companies may face sanctions of up to 5% of their net turnover (remarkably, this is considered on a global scale, not just within the European scope). The liability of directors has been removed in the latest version of the text.
4. Financial Sector
This sector is exempt from the due diligence duties of their value chain. However, they must still set a transition plan towards a 1.5°C target.
5. Next Steps
The CSDDD’s final text is set in stone, awaiting the endorsement of European leaders. Once ratified, member states have a two-year voyage to align their laws with this directive, setting a course for a sustainable future by no later than 2026.
Remember: As regulations become more complex and widespread, Harmony Analytics offers the tools and insights needed for businesses to remain compliant and strategically aligned with these global shifts. Our platform enables precise analysis and benchmarking against over 11,000 companies, assisting in meeting regulatory requirements and embracing sustainable practices.
For detailed support in navigating these changes and leveraging our analytics capabilities, visit our page: HARMONY’S METHODOLOGY
