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Businesses play a key role in creating a sustainable and fair economy and society. Companies recognise the need to act and take measures to address adverse effects of their actions on human rights or the environment, but progress is slow and uneven.

With a harmonized legal framework on due diligence for human rights and environmental impacts, the EU will set with this Directive, a transversal framework to foster the contribution of businesses operating in the single market to the respect of the human rights and environment in their own operations and through their value chains, by identifying, preventing, mitigating and accounting for their adverse human rights, and environmental impacts, and having adequate governance, management systems and measures in place to this end.

In addition, certain large companies need to have a plan to ensure that their business strategy is compatible with limiting global warming to 1.5 °C in line with the Paris Agreement.

In practice, the companies within its scope will be required to:

Integrate due diligence into policies.

• Identify actual or potential adverse human rights and environmental impacts.
• Prevent or mitigate potential impacts.
• Bring to an end or minimise actual impacts.
• Establish and maintain a complaints procedure.
• Monitor the effectiveness of the due diligence policy and measures.
• Publicly communicate on due diligence.

The new EU rules will apply to:

• Group 1: Companies with around 500 employees or more and net EUR 150 million+ turnover worldwide.
• Group 2: Companies with around 250 employees or more and net EUR 40+ million turnover worldwide, and operating in defined high impact sectors, e.g. textiles, agriculture, extraction of minerals.

This offering is part of the wide DNV sustainability services portfolio that includes validation of Environmental Performance, Carbon Foot printing and Supply-chain traceability services. In addition, DNV offers a unique Digital Product Passport service to its customers, which enables them to meet the requirements for digital availability of compliance information, as well as additional communication and post-market traceability services.

Reach out to our team of experts to know if your products will be subject to this regulation and see how we can support in your overall EU Green Deal strategy and compliance needs.