The corporate sustainability due diligence directive (CSDDD) is a crucial step in the EU’s Green Deal sustainability regulation package, and the changes it brings offer significant opportunities for companies. The long-prepared directive was approved by the European Parliament in April 2024. For the first time, European large corporations are being held accountable for human rights and environmental violations throughout their entire value chain.

Levelling the playing field

The directive aims to create common rules for companies’ own operations, their subsidiaries, and value chains. This means companies must adopt and put into effect transition plans to align their strategies and business models with the 1.5-degree climate target.

Although the directive initially applies to large companies (over 5,000 employees and a turnover exceeding €1.5 billion), its effects extend to smaller companies through value chains. Therefore, all businesses should now pay closer attention to environmental impacts and human rights compliance.

Reporting is a good thing

The corporate responsibility directive is closely linked to the EU sustainability reporting directive (CSRD), which obligates large companies to report on sustainability aspects. This reporting requirement will apply to an even broader range of companies next year. At the latest now is the time to map your company’s key ESG areas for reporting, data collection methods, and resourcing.

Even if your company is not yet covered by the sustainability directive, we encourage you to prepare a voluntary report, as we did with the pioneering ground handling company Airpro. A sustainability report clarifies your company’s sustainability efforts, engages staff, and sends a positive signal to stakeholders. Transparently communicated data can also be a competitive advantage.

There is no denying that mandatory reporting is a heavy and complex task, as we have heard from Erja Sankari of iLOQ and Sanna Laakso of CtrlPrint in our podcast. Therefore, it is crucial to maximize the communicative benefits of the report in both internal and external communications and not just bury your report PDF on your company’s website.

It’s all about the journey

Regulation should not be seen as a barrier but an opportunity for companies to develop and succeed sustainably. In sustainability communication, it is important to transparently share the company’s sustainability journey and goals, and to dare to admit incompleteness.

A well-crafted sustainability report should be utilized in diverse ways. Highlight communication themes and data visually appealingly, emphasize competitive advantages, and inspire other players in your industry.

Sustainability is, above all, about securing and enhancing future business operations. The corporate responsibility regulation offers companies the opportunity to lead the way in responsible business and build a more sustainable future for everyone.