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The Rise of Corporate Sustainability Due Diligence in 2025

Corporate Sustainability
The Rise of Corporate Sustainability Due Diligence in 2025

In 2025, corporate sustainability has taken center stage as businesses face increasing pressure to address environmental and social impacts across their operations and supply chains. One of the most significant trends shaping the landscape is the rise of comprehensive sustainability due diligence practices, driven by evolving regulations and stakeholder expectations.

The Corporate Sustainability Due Diligence Directive (CSDDD)

At the forefront of this shift is the European Union’s Corporate Sustainability Due Diligence Directive (CSDDD), adopted in June 2024 and entering into force in July 2024[8]. This landmark legislation requires large companies to analyze and monitor their business operations and supply chains for potential adverse impacts on human rights and the environment.

The directive applies to:

  • EU-based companies with more than 1,000 employees and global revenue exceeding €450 million
  • Non-EU companies generating more than €450 million in revenue within the EU

Key Requirements of the CSDDD

The CSDDD mandates several core obligations for companies within its scope:

1. Risk Assessment & Analysis: Companies must identify potential and actual adverse impacts of their business operations and supply chains on human rights and the environment.

2. Prevention & Mitigation Measures: Appropriate steps must be taken to minimize or prevent identified risks, including collaborating with suppliers and adapting internal processes.

3. Remediation & Grievance Mechanisms: A complaint mechanism must be established across the entire value chain, accessible to all stakeholders. Companies must take measures to compensate those affected or improve situations where violations occur.

4. Climate Transition Plan: Implementation of a Climate Transition Plan (CTP) to address climate protection goals.

5. Transparency & Reporting: Regular reporting on due diligence processes and outcomes, aligning with the Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS).

Implications for Global Business

While the CSDDD is an EU initiative, its impact extends far beyond European borders. The directive sets a new global benchmark for corporate sustainability practices, encouraging alignment of international standards. Non-EU companies operating in Europe must also comply, creating a ripple effect across global supply chains.

For Swiss medical device manufacturers and other industries closely tied to the EU market, proactive steps are crucial[8]:

  1. Conduct comprehensive risk assessments to map entire supply chains and identify high-risk areas.
  2. Invest in technologies like digital supply chain traceability platforms and blockchain to improve transparency and accountability.
  3. Engage with suppliers through training and long-term partnerships to meet CSDDD requirements.
  4. Align internal reporting mechanisms with CSRD and CSDDD standards.
  5. Collaborate within industry forums to share best practices and pool resources for supplier audits.

Beyond Compliance: Opportunities for Innovation

While compliance with the CSDDD and similar regulations may seem daunting, forward-thinking companies are recognizing the opportunities presented by this shift. By embracing comprehensive sustainability due diligence:

  • Enhanced Corporate Reputation: Companies can build trust with consumers and investors by demonstrating genuine commitment to sustainability.
  • Supply Chain Efficiency: Standardized frameworks can streamline supplier requirements, creating efficiencies that benefit the entire value chain.
  • Innovation & Collaboration: The push for sustainable practices is driving innovation in materials, product lifecycle management, and cross-industry partnerships.

Looking Ahead

As we move through 2025 and beyond, corporate sustainability due diligence is poised to become an integral part of business strategy. Companies that view these requirements not as burdens but as opportunities for positive change will be best positioned to thrive in an increasingly sustainability-focused global economy.

By placing sustainable values at the heart of business practices, companies can drive long-term competitiveness, build stronger stakeholder trust, and contribute to broader societal and environmental benefits. The rise of corporate sustainability due diligence marks a crucial step toward responsible governance and a more sustainable future for all.

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