The CSDDD aims to promote a more ethical global supply chain industry with a focus on addressing human rights violations within business operations. EU incorporated companies as well as non-EU incorporated companies that satisfy certain criteria outlined in the CSDDD are required to implement risk-based due diligence measures to identify and address adverse human rights and environmental impacts which occur in their engagements, or the engagements of their subsidiaries, or business partners in their chains of activities inside and outside of Europe.

Companies will also have to develop transition plans for climate change mitigation to ensure that their business strategies are compatible with limiting global warming, and these transition plans should include emissions reduction objectives.

Failure to comply with the CSDDD will lead to civil liability and enforcement will be secured through administrative supervision through national supervisory authorities.

The CSDDD will affect a South African company if it is a subsidiary or part of the global value chain of a company inside or outside of the EU which is bound to the obligations envisaged in the CSDDD. South African companies are encouraged to consider the obligations set out in the CSDDD and ensure that they comply with it to avoid any reputational, legal or financial liability.