What are they key differences between the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (referred to as CSDDD or CS3D) and how is ESCP supporting its members to comply?
In May 2024, the EU Council gave its final approval on two sustainability directives: the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (referred to as CSDDD or CS3D) as part of the European Green Deal.
While they differ in focus, CSRD demanding transparent reporting and CSDDD requiring active due diligence, together they create a framework that integrates sustainability into corporate governance and supply chains.
These directives represent both challenges in the short term and opportunities in the long-term for businesses. As soon as they were drafted, members of the Ethical Supply Chain Program (ESCP), were immediately able to begin building their frameworks benefiting from the program’s trusted grievance mechanism, easy-to-access Connect platform data and expert on-the-ground support.
In the long-term, both the CSRD & CSDDD give organisations operating globally a clear framework and guidance to become climate-neutral by 2050 and enable a just transition, as well as enhancing visibility of the entire value chain.
Both are important for businesses operating with global supply chains. The CSRD provides the framework and transparency to disclose ESG risks and performance. The CSDDD ensures companies act on risks in their value chains, not just report them. Information for both will need to be submitted via the European Single Access Point (ESAP).
Together, they bring all suppliers, not only tier 1, into the spotlight. For businesses operating globally, this means that data collection, supplier engagement, and risk management are no longer optional, but legal imperatives.
The CSDDD requires companies to establish and maintain effective grievance mechanisms, with timelines starting as soon as 2027. There has been much discussion around how the EU qualifies ‘effective’, but to us, this means a trusted service that supports root cause identification and improves the lives of workers.
ESCP has operated a confidential grievance mechanism service for supply chain workers since 2010, providing access to over 10 million workers.
The ESCP Worker Helpline is supported by Helpline Analytics which enable businesses to export the required data, understand the situation on the ground in their supply chain while providing a vital support system for workers.
Both frameworks require businesses to understand their impact on society and the environment, and you cannot begin to know what you don’t measure. ESCP’s Connect Platform enables program members to not only track key ESG metrics, but monitor and measure performance over time. This data granularity enables businesses to identify high risk areas, the root cause of issues and build a roadmap for improvement.
Unlike audit-only programs, ESCP provides remediation support, ensuring no outstanding non-compliances and clear evidence of remedying adverse impacts on human rights.
The CSRD & CSDDD represent significant change in processes for many businesses, ESCP’s expert team are there to ensure the transition to greater transparency is as smooth as possible for new member organisations.
We know the value of good relationships with suppliers – and we are proud to have built up thousands all over the world. The ESCP team are located all over the world and can help businesses build capacity to remedy issues found on audit, find new suppliers within the ESCP program, as well as communicating with existing suppliers to explain reporting requirements and the future of manufacturing.
The ESCP Worker Helpline was developed for workers in manufacturing setting but is now adopted across multiple industries such as construction.
The CSRD and CSDDD are transforming how companies manage and disclose sustainability performance. Compliance may feel complex, but with the right support, it becomes a catalyst for better governance, stronger supplier relationships, and transparent impact reporting.
The Ethical Supply Chain Program provides actionable pathways to meet EU standards and lead with integrity in global supply chains. For businesses unsure where to start in the face of new global legislation,speak to a member of the team today.
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