Corporate Sustainability Due Diligence Directive
- directive = needs to be transposed
- another deadline Austria has to meet
aim at some point
- EU companies with 1k+ employees and >450 mil EUR turnover globally
- very huge companies, even larger than PIEs
- why only so large companies?
  - mostly about politics, drafts were more strict
  - hard to apply regulation which forces behavior instead of just disclosing

Requirements

Due Diligence process
- risk assessment
  - Double Materiality applies here
- risk management systems
- notification systems
  - similar to whistleblower hotline
- prevention and corrective action plans
- climate transition plan
  - also included in ESRS E1
Chain of Activities
- own operations
- operations of subsidiaries
- operations of direct and indirect business partners
Documentation & Disclosure
- not just disclosure, first implement due diligence process and then disclose on what you have DONE, not just what data you have collected

Due Diligence Process

Code of Conduct
- Employees + Suppliers
Risk Assessment
- identify adverse impacts
- rank based on severity and likelihood
- similar to Materiality Assesment, but with risks
Prevention and Mitigation
- prevent/mitigate adverse impact
Notification Mechanism
- trade unions, people effected, civil society organisations can bring in complaints
- complaints have to be viewed
Monitoring and Communicating
- annual statement
- reassessment every year
Provide Remediation
- adverse impact that can’t be prevented/mitigated anymore have to be compensated
- e.g. farmer dying on a field

Penalties
- based on global net sales
- may not be less than 5% in relation to previous year
Civil Liabilities
- intentional or negligent breach of duty
- requires proof of causation (could have been prevented/mitigated)
- no civil liability if harm solely caused by business partners within the supply chain

goal: compatibility with the Paris Agreement target and climate neutrality
actual steps which need to be defined
- climate targets for 2030 and 5 year steps until 2050 regarding GHG Emissions
- decarbonization levers identified
- quantification of investments/financial resources necessary
- role of administrative, management and supervisory bodies
- update the plan every 12 months
  - easy to fake the new report every 12 months
obligation of implementation and action
- what is in the report needs to happen, if a climate target is not reached bc the estimates were wrong there are no sanctions
- again linked to Transparency Theory for enforcing change through stakeholders
not obligation of success
- no obligation to report failure, can just move deadline 2 years back
- kind of Greenwashing, since only relative GHG Emissions are part of the report, not actual numbers