What the EU Corporate Sustainability Due Diligence Directive Says About Contracts
RCP Policy Brief
In its 2024 Policy Brief, "What the EU Corporate Sustainability Due Diligence Directive (CSDDD) Says About Contracts," RCP analyzes the content of the CSDDD with respect to commercial contracts—one of the key tools that companies are expected to employ in meeting their human rights and environmental due diligence (HREDD) obligations. We invite you to download a PDF of the brief below or access it on SSRN.
In August 2025, RCP published an academic article that offers a more extensive textual analysis and a deeper dive into the dos and don'ts of due diligence-aligned contracting of the CSDDD, available on SSRN.
In May 2026, the RCP Team conducted a further analysis of the CSDDD in light of Omnibus I, a series of amendments to the CSDDD adopted by the European Commission through Directive 2026/470 EU. Our analysis is available on the Oxford Business Law Blog here. You may also download it as a PDF.
On July 5, 2024, the EU Corporate Sustainability Due Diligence Directive (CSDDD) was published in the Official Journal of the European Union. It entered into force on July 25, 2024, and Member States will have to transpose the Directive into national law by July 26, 2026.
In this Policy Brief, "What the EU Corporate Sustainability Due Diligence Directive (CSDDD) Says About Contracts," RCP analyzes the content of the CSDDD with respect to commercial contracts—one of the key tools that companies are expected to employ in meeting their human rights and environmental due diligence (HREDD) obligations.
We invite you to download a PDF of the brief on our website or access it on SSRN.
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Summary Chart:
The Dos and Don'ts of CSDDD-Aligned Contracting
Dos
Don'ts
Share contractual responsibility for HREDD.
Commit to cooperate to address adverse impacts in an on-going, risk-based, and dynamic fashion to incentivize transparency and trust.
Commit to responsible purchasing practices and fair commercial terms with all partners, but especially SMEs . Where possible, commit the seller to do the same with its sellers.
Commit to fair commercial terms that can support effective HREDD.
Ensure that HREDD-related costs are fairly distributed in the contract, based on the parties’ respective capacities and resources. Ensure that business partners have the capacity and support needed to meet HREDD requirements. This is important for all partners, but especially SMEs.
Jointly prioritize human rights and environmental remediation over suspension, cancelation, and termination. Clarify termination is a last resort.
Use contracts simply to transfer HREDD responsibilities and obligations to business partners.
Use contracts to establish one-sided (supplier-only) obligations on a strict liability basis where any imperfection is a breach + partners are incentivized to hide problems.
Ignore the reality that the buyer’s purchasing practices can contribute to, or jointly cause, and aggravate adverse impacts.
Use contracts to formalize unfair commercial terms that can aggravate adverse impacts.
Overwhelm suppliers with unreasonable HREDD expectations, obligations, and informational requirements (e.g., questionnaires, scorecards, reports).
Aggravate the risk of adverse impacts via immediate (zero-tolerance) termination rights.
“Cut and run” at the first sign of HREDD-related trouble.
Commit to exiting responsibly by giving reasonable notice and taking measures to mitigate the impacts of termination.
Latest News
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May 1 — RCP published a new analysis of the CSDDD and contracting in light of Omnibus I on the Oxford Business Law Blog: Moving Toward Shared Responsibility: How the EU’s CSDDD and Omnibus I Reimagine Contracting for Human Rights and Environmental Due Diligence. Also available as a PDF.
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April 27 — RCP Director Sarah Dadush and Senior Advisor John Sherman co-authored an essay for Shift's series marking the 15th anniversary of the UN Guiding Principles on Business and Human Rights (UNGPs), titled, From Social Norm to Legal Practice: Fifteen Years of Integrating the UNGPs into Business Law.
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April 9 — RCP has launched its latest tool, the Responsible Contracting in Spice Supply Chains Guidance, developed in collaboration with the Sustainable Spice Initiative (SSI).
Events
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May 2026 — Check back soon for updates!
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