How CSDDD Affects Sustainability Teams: A 2029 Guide
Tomas Novotny
Solutions Expert
13 Feb 2026
About 6 mins
The EU’s Corporate Sustainability Due Diligence Directive (CSDDD) is transforming the landscape of corporate responsibility.
For sustainability teams, it elevates their function from a supporting role to a central pillar of business strategy and legal compliance. The directive mandates a proactive, risk-based approach to managing human rights and environmental impacts, making sustainability a core operational requirement.
So, how does CSDDD affect sustainability teams? In essence, it empowers them to lead the integration of due diligence across the organisation. Sustainability teams will be responsible for embedding human rights and environmental risk management into company policies, monitoring the entire “chain of activities,” guiding remediation efforts, and overseeing mandatory public reporting. They will become the primary drivers of the company’s compliance strategy, ensuring the business not only meets but exceeds its legal obligations.
This guide explores the specific ways CSDDD affects sustainability teams, outlining new responsibilities and providing a clear roadmap to prepare for the 2029 deadline and beyond.
Shifting from voluntary initiatives to legal obligations
For years, sustainability teams have championed corporate responsibility through voluntary frameworks and reporting standards. The CSDDD marks a significant shift by introducing legally binding due diligence obligations. This change provides sustainability professionals with the legal backing necessary to implement robust programs that were previously difficult to enforce internally.
The directive moves beyond simple reporting on ESG performance. It requires companies to actively identify, prevent, mitigate, and remedy adverse impacts. This transition empowers sustainability teams to demand cross-departmental collaboration and secure the resources needed to build truly resilient and ethical supply chains. Failure to comply can result in significant penalties, including fines of up to 3% of global turnover, making the sustainability team’s role more critical than ever.
How does CSDDD affect sustainability teams’ core functions?
The directive’s requirements will reshape the daily operations and strategic focus of sustainability departments. Here is a detailed breakdown of the key areas where sustainability teams will see their responsibilities expand.
Integrating due diligence into company-wide policies
A primary task for sustainability teams will be to ensure that due diligence is woven into the fabric of the company’s governance and operational policies.
Key responsibilities will include:
- Policy development: Crafting and updating comprehensive due diligence policies that articulate the company’s approach to identifying and managing human rights and environmental risks.
- Code of Conduct implementation: Working with procurement to develop and enforce a supplier code of conduct that aligns with CSDDD requirements.
- Cross-functional training: Educating employees, subsidiaries, and key business partners on their roles and responsibilities under the new policies to ensure company-wide alignment.
Leading risk assessment and management
CSDDD mandates a risk-based approach, requiring companies to focus on the most severe and likely impacts within their chain of activities. Sustainability teams will orchestrate this process.
This involves:
- Risk scoping: Conducting an initial scoping exercise to map the company’s entire chain of activities—from raw material extraction to downstream logistics—to identify inherent social and environmental risks.
- Prioritising high-risk areas: Using risk assessment tools and data to prioritise supply chains, geographies, and commodities where adverse impacts like forced labour, biodiversity loss, or excessive GHG emissions are most probable.
- Developing action plans: Creating preventive and corrective action plans with clear timelines and measurable indicators to mitigate identified risks, and collaborating with procurement and suppliers to implement them effectively.
Overseeing monitoring, remediation, and grievance mechanisms
Identifying risk is only the first step. Sustainability teams must also ensure that effective systems are in place to monitor progress, address harms, and listen to stakeholder concerns.
Your team’s role will be to:
- Monitor Effectiveness: Regularly assess the efficacy of due diligence measures—at least every five years as required—and use these findings to refine strategies and improve outcomes.
- Guide Remediation: When adverse impacts occur, you will lead the process of providing or enabling remediation. This could involve financial compensation for affected workers or collaborative initiatives to restore damaged environments.
- Establish Grievance Channels: Ensure the company maintains accessible and effective grievance mechanisms for workers, communities, and other stakeholders to report concerns, and that there is a clear process for follow-up and resolution.
Managing public reporting and stakeholder communication
Transparency is a cornerstone of the CSDDD. Companies must publicly communicate their due diligence efforts in an annual report. Sustainability teams will be at the helm of this reporting process.
This includes:
- Compiling Annual Statements: Gathering data from across the organisation to produce a detailed annual report on due diligence activities, to be published on the company website.
- Stakeholder Engagement: Carrying out meaningful engagement with trade unions, civil society organisations, and affected communities to incorporate their feedback into due diligence strategies.
- Communicating Progress: Regularly communicating progress on sustainability goals to investors, customers, and other key stakeholders to build trust and demonstrate resilience.
Actionable steps: how sustainability teams can prepare for CSDDD
With the 2029 deadline approaching, proactive preparation is crucial. Sustainability teams should begin laying the groundwork now to ensure a smooth transition to compliance.
1. Lead a comprehensive gap analysis: Assess your company’s existing policies, risk management systems, and reporting practices against CSDDD requirements. Identify gaps and create a detailed roadmap with clear milestones for achieving compliance.
2. Champion cross-departmental collaboration: CSDDD compliance is a team sport. Establish a cross-functional working group with representatives from procurement, legal, HR, and operations to create integrated workflows and assign clear accountability.
3. Map your chain of activities: Begin the complex process of mapping your supply chain to gain visibility beyond your direct suppliers. Understanding your upstream and downstream partners is fundamental to identifying and managing risks effectively.
4. Invest in Technology and Tools: Manual due diligence is impractical for modern supply chains. Advocate for investment in a centralised data platform to help assess risk at scale, monitor supplier performance, and streamline reporting.
5. Develop a stakeholder engagement plan: Identify key internal and external stakeholders and create a plan for engaging them throughout your compliance journey. Their insights are invaluable for informing your strategy and building a ground-level understanding of risks.
The future is proactive, integrated sustainability
The CSDDD formalises the critical role that sustainability teams play in modern business. It provides the mandate to drive meaningful change, build resilient supply chains, and protect the company from significant legal, financial, and reputational risks. By embracing these new responsibilities, you can position your team as an indispensable driver of long-term value.
The directive’s requirements are complex, but the opportunity is clear. Start your preparations now to ensure your organisation is not only compliant but also a leader in responsible business practices.
Download our simple CSDDD guide for businesses here
Want to find out more?
At Sedex, we empower sustainability teams to navigate the complexities of CSDDD compliance with confidence. Our platform provides the tools and insights you need to map your supply chain, assess risks, and implement effective due diligence processes.
