CS3D Directive: the contribution of interim management

The CS3D (Corporate Sustainability Due Diligence Directive), recently adopted by the European Parliament, imposes new obligations on companies in terms of human rights, the environment and corporate governance.

This directive aims to ensure that companies identify, prevent, mitigate and, where necessary, eliminate the negative impacts of their activities on these areas.

These requirements apply both internally and within their supply chains.

The new rules apply to European companies and parent companies with over 1,000 employees and worldwide net sales of over €450 million.

Franchises and non-European companies meeting the same sales thresholds in the EU are also affected.

The CS3D directive imposes the following requirements on companies:

• Duty of care: Identify, prevent and mitigate the negative impacts of their activities on human rights and the environment.
• Public policy: Publish a sustainability due diligence policy, including information on how they identify and manage risks to human rights and the environment.
• Impact assessment: Regularly assess and publish the actual and potential impacts of their activity.
• Preventive/corrective measures: Implement actions to manage negative impacts.
• Complaints mechanism: Enable stakeholders to report negative environmental impacts or human rights violations.
• Communication: Report publicly on efforts and measures taken.
• Liability: Being responsible for damage caused by their activity or that of their business partners in the value chain, and being subject to sanctions in the event of non-compliance.
• Training: Train employees and partners on sustainability due diligence obligations.

These obligations aim to ensure that European companies and those operating in the EU adopt responsible and transparent practices, thereby reducing their negative impact on society and the environment.

To give companies the time they need to comply with the new requirements, the directive provides for a gradual implementation:

• From 2027: Companies with over 5,000 employees and global sales in excess of €15 billion will have to comply.
• From 2028: Companies with over 3,000 employees and total sales of over 900 million euros will also be affected.
• From 2029: All other companies falling within the scope of the directive, i.e. those with more than 1,000 employees and worldwide sales in excess of €450 million, will have to comply.

This gradation gives different categories of company time to prepare for the directive's requirements.

In the event of non-compliance, companies risk heavy penalties. They could be fined up to 5% of their worldwide net sales.

In addition, they will have to answer for the damage caused by non-compliance with their obligations. This includes full compensation for victims of negative impacts.

These sanctions underline the importance of rigorous, proactive compliance.

In this demanding context, Delville Management's interim managers are the partners of choice to help companies navigate this new regulatory environment.

Their expertise can help you in the following areas in particular:

• Risk assessment and prioritization

Interim managers provide a proven methodology for identifying and prioritizing risks. This ensures that companies meet the requirements of the CS3D directive in a structured and efficient way.

• Implementing tools and processes

They help set up the necessary verification tools, leveraging advanced technological solutions to ensure ongoing compliance. Their experience in project management is essential for the rapid and efficient deployment of these systems.

• Accompanying change

Interim managers play a key role in driving organizational change. They help to integrate the new CS3D-related practices within the company, ensuring a smooth transition and minimizing operational disruption.

• Training and awareness-raising

They also provide training and awareness programs for internal teams. This ensures that all levels of the organization understand and support the measures taken to meet the new regulatory obligations.

In conclusion, the entry into force of the CS3D directive represents a considerable challenge for companies. However, it is also an opportunity to strengthen their governance and social responsibility practices.

Delville Management, with its expertise in interim management, is the ideal ally to support companies in this transformation.

By calling on our services, companies can approach this period of change with confidence and serenity, assured of complying with the new standards while continuing their development.

To find out more about how our interim management firm can help your company comply with the CS3D directive, contact us.