International Legal Vision | Crossing the Compliance Threshold: A New Journey of Supply Chain Review of Chinese Enterprises under the EU CSDDD Directive
Published:
2024-06-06
With the global emphasis on sustainable development and environmental protection increasing, on May 24, the European Council approved the "Corporate Sustainability Due Diligence Directive". The introduction of the directive marks an important step in the EU's promotion of supply chain sustainability, and also brings stricter legal requirements for the review of European supply chains by Chinese companies. This article will delve into the legal implications of the Directive for European supply chain reviews by Chinese companies.
Introduction
With the global emphasis on sustainable development and environmental protection, on May 24, the Council of the European Union approved the "Corporate Sustainability Due Diligence Directive" (Corporate Sustainability Due Diligence Directive,CSDDD). The introduction of the directive marks an important step in the EU's promotion of supply chain sustainability, and also brings stricter legal requirements for the review of European supply chains by Chinese companies. This article will delve into the legal implications of the Directive for European supply chain reviews by Chinese companies.
Background on the 1. of the EU CSDDD Directive
After being signed by the President of the European Parliament and the President of the Council of the European Union, the CSDDD directive will enter into force 20 days after its publication in the Official Journal of the European Union. Member States have a two-year transition period to translate the new rules into national law.
Overview of 2. EU CSDDD Directive
The EU CSDDD Directive is a far-reaching regulation that aims to promote the overall sustainable development of enterprises in the supply chain. The core objective of the Directive is to ensure that businesses pursue economic efficiency while fully respecting human rights, protecting the environment and maintaining good governance systems.
To achieve this goal, the directive requires companies to conduct rigorous due diligence on all aspects of their supply chain, including a comprehensive assessment of suppliers in terms of labor rights, environmental protection, business ethics, etc., to identify and prevent potential risks. Once any behavior is found to be inconsistent with the principles of sustainable development, companies must take immediate action to take the necessary measures to mitigate or eliminate these risks.
In addition, the directive also clearly defines the legal responsibilities that enterprises may face in violation of the regulations, so as to strengthen the compliance awareness of enterprises and ensure that enterprises can effectively fulfill their social responsibilities in the supply chain. Through the implementation of this directive, the EU hopes to promote enterprises to actively change their business methods and contribute to global sustainable development.
3. the scope of application of the EU CSDDD Directive
The EU CSDDD Directive will gradually apply to EU companies and non-EU companies that meet the same turnover threshold in the EU.
Legal Requirements for European Supply Chain Review of Chinese Enterprises in 4.
Analysis of the Legal Impact of 5. EU CSDDD Directive on Chinese Enterprises
Summary
The introduction of the EU CSDDD directive has brought more stringent legal requirements for Chinese enterprises to review the European supply chain. Chinese enterprises need to enhance their awareness of legal risks, strengthen supply chain management, promote international integration and deal with challenges and opportunities, and better adapt to the legal environment of the European market and enhance their competitiveness by actively fulfilling their social responsibilities and promoting sustainable development.
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