The EU Directive 2024/1760 of 13 June 2024, published in the Official Journal of the European Union on 5 July 2024, establishes a new duty of care for companies to ensure the sustainability.
This legislation amends the Directive (EU) 2019/1937 and the Regulation (EU) 2023/2859, highlighting the importance of the Corporate Sustainability Due Diligence Directive (CSDD) as the centrepiece of European and national legislation for the coming years.
Aims of the directive
The Directive clearly defines the conduct of companies as fundamental to the success of the sustainability goals of the Union.
Companies, in particular large companies, must adopt due diligence procedures that ensure transparency and respect for human and environmental rights.
SMEs, although not directly covered by legislation, may be involved
as contractors or subcontractors.
Duties and procedures
Companies must integrate the duty of care into their policies and risk management systems, adopting verification measures, such as:
- identification and assessment of negative impacts;
- adoption of preventive and corrective measures;
- implementation of a complaints reporting and handling system.
Reference is made, for example, to the following areas of intervention:
- Code of Ethics
- Management policies for suppliers and the procurement chain
- Equal pay
- Employee information processes and policies
- Human rights due diligence
- Occupational health and safety
- Dedicated training plans
- Gender equality
- Inclusiveness
Reference is made, for example, to the following management tools:
- Internal mobility and succession policies to managerial positions consistent with the principles of an inclusive organisation attentive to the objectives of intergenerational transition.
- Dedicated politics of reconciliation policies and protection of maternity and paternity.
- Risk Assessment Document (DVR) updated to the harassment and bullying risks.
- Policies dedicated to reward policies, career advancement and, in general, transparency in the adoption of remuneration policies.
- Sustainable labour policies accompanied by the provision of specific training plans oriented towards production, environmental and climate sustainability goals.
- Policies for the digital well-being of workers, especially in view of the ethical challenges of artificial intelligence.
- Envisaging the inclusion of new professional figures such as the disability manager/diversity manager.
- Adoption of standards, including global standards, on a voluntary basis.
Consequences of non-compliance
Failure to implement the legislation may result in:
- Civil liability: companies may face litigation for damages caused by failure to take the due diligence measures required by the Directive.
- Interruption of activities: The authorities may order the suspension of operations harmful to society and the environment.
- Duties and product bans: Companies that do not comply with the CSDD may face additional duties on their products or, in extreme cases, a ban on exporting certain products to EU member countries.
- Suspension of the possibility to export: Failing companies may have their possibility to export their products to EU Member States suspended.
Contact Lexellent for further information about EU Directives introduced in corporate due diligence for sustainability purposes.
