On December 1, 2022, the Council of the European Union adopted its negotiation position on the corporate sustainability due diligence directive.
Similar regulations of supply chain due diligence have been enacted or implemented in multiple member states, such as Germany and France. This directive will unify, if it would be implemented, supply chain acts regulations of the Member states.
EU companies will be in scope if the number of employees and annual revenue are above a certain threshold, while Non-EU companies will be in scope if annual revenue becomes above a certain threshold. In addition, a certain industry is defined as a high-risk industry and companies will be in scope with less threshold than others if over 50% of revenue is generated from high-risk industry business.
Downstream business partners related to the distribution, transport, storage, and disposal of the product, including dismantling, recycling, composting or landfilling, where the business partners carry out those activities for the company or on its behalf, are also subject to due diligence.
This position will be negotiated with the European Parliament.