The European Union is preparing a new Corporate Responsibility Directive (Corporate Sustainability Due Diligence Directive), which seeks to accelerate the implementation of corporate responsibility obligations. The Directive emphasises the importance of human rights and environmental issues and, in this context, concerns enterprises employing more than 250 people or exchanging 40 million people. However, these companies are also beginning to demand accountability from their subcontractors, suppliers and partners.
Coverage. The directive applies to large companies operating in the EU and outside the EU, but its implications also extend to smaller subcontractors.
Sustainability in the supply chain. Companies must ensure that their subcontractors adhere to strict accountability standards.
Sanctions. Neglects in corporate responsibility can lead to significant fines.
Smaller growth companies must also demonstrate their ability to meet accountability standards in order to remain competitive and maintain customer relationships. The new Corporate Responsibility Directive could enter into force in Finland as early as 2025. This means that Finnish companies, including growth companies and subcontractors, should start preparing for these changes already.
1. Check for suitability. Find out if the directive applies directly to your company.
2. Evaluate partners. Check if your partners are complying with accountability standards.
3. Be prepared for the demands. Think about how to adequately meet the requirements of the Directive for customers.
4th. Contracts in order. Make sure that your contracts include terms and conditions relating to liability.
5. Financial Perspective. Pay attention to how accountability affects the price and availability of your financing.
6. Affirmations. Check to see if your insurance policy offers protection against non-compliance obligations.
7. Strategy and Governance. Align your business model and strategy with sustainability goals.
8. Get educated. Make sure you know the requirements for your industry and your customers.
9. Set goals. Define clear goals for your responsibility work and ways to achieve them.
10. Communicate actively. Communicate openly to your stakeholders about your responsibility actions and goals.
Accountability is no longer just a concern of large companies. Growth companies and subcontractors need to understand that accountability is key to business continuity and growth. The Corporate Responsibility Directive brings with it new requirements, but also opportunities to differentiate oneself and strengthen one's position in the market. It is important to act now to keep up with the change and take advantage of the opportunities that accountability brings.
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