- CS3D aims to foster sustainable and responsible corporate behaviour and to anchor human rights and environmental considerations in companies’ operations and corporate governance.
- Key Features:
- Need to follow Due Diligence: Includes methods through which corporates can account their actual and potential adverse impacts, such as pollution, child labor etc.
- Companies will also have to adopt a transition plan to make their business model compatible with the Paris Agreement global warming limit of 1.5°C.
- Coverage:
- EU companies and parent companies with over 1000 employees a worldwide turnover higher than 450 million euro.
- Non-EU companies, parent companies and companies with franchising or licensing agreements in the EU reaching the same turnover thresholds in the EU will also be covered.
- Penalties for violations: It include “naming and shaming” and fines of up to 5% of companies’ net worldwide turnover.
- Need to follow Due Diligence: Includes methods through which corporates can account their actual and potential adverse impacts, such as pollution, child labor etc.
- Concerns Related to CS3D: It poses challenges for companies from developing and underdeveloped countries. They need to invest more resources to comply with the regulation