Supply chain due diligence is no longer a matter of regulatory box-ticking – it’s a business-critical function that extends well beyond the scope of the EU’s Corporate Sustainability Due Diligence Directive (CSDDD). While the CSDDD has brought much-needed focus to human rights and environmental obligations, the pressure on companies is mounting from multiple fronts: evolving global legislation, investor expectations, ESG disclosures, and supply chain disruptions.
CSDDD timelines may shift, but the real risks are already there.
The current draft of the CSDDD sets July 2028 as the deadline for companies with more than 5,000 employees and €1.5 billion in revenue to comply, with a one-year delay for smaller firms (1,000+ employees, €450 million+ revenue). However, legal risks are already surfacing.
NGOs and civil society actors are actively invoking national legislation in court. In one case, a French energy company faced scrutiny over a wind farm project in Mexico due to potential impacts on the local population. In another, a multinational was held liable for water pollution in Chile. In both, breaches of due diligence obligations were cited, reinforcing that action is expected now, not years from now.
Organizations must view due diligence through a wider lens.
Due diligence isn’t a one-time checklist, it’s a complex, continuous process that involves:
1. Mapping Risk Across the Entire Supply Chain
Where do risks exist across your own operations and sub-tier suppliers?
What legal, ethical, or environmental breaches may occur — even indirectly?
2. Taking Action Based on Risk
What specific actions must your organization take to reduce risk?
How are these actions tracked, documented, and improved?
3. Integrating Due Diligence into Global ESG Strategy
Are isolated efforts aligned into a single, measurable ESG framework?
Can you compare performance across suppliers and geographies?
4. Creating Awareness and Ownership
How are ESG risks communicated to suppliers?
Do your supplier relationships foster accountability and transparency?
Bottom line: don’t wait for CSDDD – start now.
While CSDDD compliance may still be years away for some, the operational, reputational, and financial risks of inaction are immediate. A proactive due diligence approach not only positions your company for compliance, it also builds supply chain resilience, stakeholder trust, and long-term competitive advantage.
With Sphera’s AI-powered Supply Chain Risk Management solution, companies can:
- Collect consistent, real-time data across global supplier networks, beyond Tier 1
- Comply with global compliance requirements
- Identify and act on emerging risks before they escalate
Learn more and watch our full-on demand webinar:
“Supply Chain Due Diligence Through a Sustainable Procurement Lens”
Gain insights from legal and sustainability experts on how to move beyond compliance and build smarter, more resilient procurement strategies.
