Directive (EU) 2024/1760 requires large companies operating in the EU to identify, prevent, mitigate and account for adverse human rights and environmental impacts across their own operations, their subsidiaries, and their chains of activities — with a transition plan for climate change mitigation.
Corporate Sustainability Due Diligence Directive
Directive European Union
The Corporate Sustainability Due Diligence Directive obliges large companies to run a risk-based due diligence process across their chain of activities — identify adverse human rights and environmental impacts, act to prevent or end them, and report on it. It is the EU-level sibling of Germany’s LkSG, and it applies to non-EU companies above a turnover threshold in the EU market as well.
- Chain of activities, not just tier one - The obligation reaches upstream to established business relationships, which is where the data problem begins.
- Risk-based, not exhaustive - Companies prioritize by severity and likelihood, which leaves the depth of the evidence to the company.
- Climate transition plan - A separate obligation to adopt a plan compatible with limiting warming to 1.5°C.
- Civil liability - Member states must provide for liability for damage caused by failure to comply.
For API operations the salient fact is what the directive does not say. It requires a company to know things about its suppliers and to report what it knows. It specifies no exchange format, no interface, and no interoperability requirement between the companies that have to share the underlying data. A company can satisfy it completely with a questionnaire, a warehouse and a PDF, and The State of Supply Chain APIs found that most do — which is why supply chain carries a wave of new regulation and no corresponding rise in machine-readable contracts.
Referenced in API Evangelist papers
This regulation shows up in my published research. These reports read the machine-readable evidence provider by provider — and put this regulation in the context of a real sector.
The State of Supply Chain APIs
A due diligence obligation that lands on the report rather than the interface — the mechanism behind an industry that buys reporting software instead of building contracts.
