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Become a partnerCSDDD compliance: new territory for you, routine for us
With the CSDDD supply chain directive, the EU is standardizing sustainable business practices and due diligence obligations at the European level — the directive expands on the German LkSG. After hundreds of LkSG implementations, VERSO is the partner that truly understands due diligence obligations. Our AI-powered CSDDD software enables companies to establish due diligence processes efficiently, automatically, and flexibly.
The Supply Chain Platform has further increased transparency across our suppliers. That was a major gain for us.
We chose VERSO because the platform helps us actively manage our supply chain. Specifically, it supports us in creating transparency, qualifying suppliers, analyzing risks, and thus implementing our due diligence obligations and achieving our sustainability goals.
What impressed us most was how easily the VERSO Supply Chain Hub enables transparency across the upstream supply chain. With automated risk analysis and professional support, we can efficiently meet the requirements of the LkSG and other regulations.
With the VERSO Supply Chain Platform, we have found a solution that allows us to engage with suppliers on the right topics and drive change in the supply chain.
The partnership with VERSO is an important step toward gaining a holistic overview of our international supply chain and creating transparency deep into our complex supply and value chain.
Thanks to the VERSO Supply Chain Hub, we had nearly all our suppliers on board within a very short time and now have a meaningful risk analysis at our disposal. The transparency we have gained in the supply chain forms a solid foundation for long-term partnerships and sustainable measures.
CSDDD After Omnibus: Why Supply Chain Laws Remain Relevant
The Corporate Sustainability Due Diligence Directive (CSDDD for short and often referred to as the EU Supply Chain Act) is a new EU directive designed to ensure that human rights and environmental standards are strictly observed throughout the supply chain — with an extended scope and stricter requirements.
The Omnibus package raised the thresholds and also postponed the start date for application. However, this does not make the CSDDD and other due diligence obligations irrelevant:
- Starting early pays off: Risk analyses and robust due diligence processes cannot be built on short notice. Those who start early save time, effort, and coordination headaches down the road.
- Relevant beyond the CSDDD: Other regulations such as the LkSG or the UK Modern Slavery Act also require robust processes.
- Added value for risk management: Risk analyses are not only useful for regulatory purposes — they also create transparency around vulnerabilities in the supply chain and thereby strengthen risk management.
LkSG and CSDDD: The Differences
The LkSG and CSDDD require companies to systematically identify, assess, and effectively address human rights and environmental risks along their supply chains — including clear documentation and verification obligations.
While the LkSG already sets out risk analyses, preventive measures, and complaints procedures, the CSDDD expands this framework to the EU level — for instance, by linking it with CSRD reporting and integrating climate targets in line with the 1.5°C pathway.
For companies, this means that due diligence obligations are becoming more comprehensive, integrated, and strategic. Here is what the CSDDD adds:
- Continuous analysis of potential and actual risks, with new risk categories requiring a more comprehensive and granular risk assessment
- Risk mitigation within a company’s own scope of influence
- Reporting as part of CSRD reporting
- Setting up a complaints channel covering the entire value chain
The good news: If you are already implementing the LkSG, your work was by no means in vain. Since the CSDDD should be understood as an extension to the LkSG, you can build on your existing LkSG management system.
Establish a Supplier Data Foundation
The basis for meeting any due diligence requirements in the supply chain is a clear overview of your procurement processes: Which suppliers provide the company with which product groups, and from which regions are these goods sourced? The first step toward CSDDD and LkSG compliance is therefore to consolidate and supplement all relevant supplier information — automatically and with AI support:
- Easy import of supplier master data via batch upload or REST API
- Automatic completion of missing data such as NACE codes or country of registration through AI
- AI-based scraping of existing certificates and documents, as well as upload of existing ERP files
- Segmentation of suppliers by predefined or custom-defined tags
- Multilingual user interface for global supply chains
- Free to use for suppliers, with shareable profiles
- Real-time monitoring for changes in supplier data
Abstract and Concrete Risk Assessment
So what do you do with all this data? The CSDDD, LkSG, and similar regulations require you to carry out both an abstract and a concrete risk analysis: Suppliers with active business relationships must be assessed and prioritized according to their risks. You then need to validate these results, verify the risk potential, and demonstrate your efforts to obtain missing supplier data. With VERSO, this is easy:
- AI-based risk assessment covering ESG, financial, reputational, and cyber risk
- Compliance through methodological alignment with LkSG, CSDDD, and UN Guiding Principles
- Customizable risk score tailored to your company
- Analysis at the level of sites, raw materials, and countries of origin
- Automatic notifications for changes in risks or ESG compliance
- Automated distribution, collection, and evaluation of questionnaires, evidence, and documents
- 13 standardized assessments provide a direct evaluation of concrete risks and preventive measures at the supplier level
Preventive and Remedial Measures
Risks have been identified — but what next? Due diligence regulations such as the CSDDD and LkSG require companies to establish appropriate preventive measures. If you receive indications of concrete violations, you must follow up on them. Here is how we help you identify risks and initiate measures:
- Alerts, warning notifications, and screening for relevant events such as environmental disasters, sanctions, or human rights violations
- Requesting statements from suppliers with just a few clicks
- Automatic identification of required measures through the Maturity Assessment
- Documentation and tracking of measures for risk mitigation and compliance
- Comprehensive measures database with automated recommendations for action
- Central management of certificates, including continuous monitoring of deadlines
- Clear responsibilities through task management and automatic reminders
Documentation and Reporting
Documentation is essential for compliance. Under the LkSG and CSDDD as well, your efforts to fulfill due diligence obligations must be continuously documented and retained. Here, too, it pays off to have everything centrally consolidated in one place through a dedicated supplier management platform:
- Transparent documentation of measures, efforts, and evidence
- Clearly organized storage of all requests and their status
- Export function for reporting to external platforms, authorities such as BAFA, or for sustainability reporting
References
VERSO — Your Partner for CSDDD and LkSG
VERSO is the pioneer in sustainability and ESG software for mid-sized companies — with solutions that scale with your business and stay up to date with regulatory developments. We work closely with our legal partner Taylor Wessing to provide you with the highest possible level of legal certainty.
We guide you through sustainability.
Including your supply chain.
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See the VERSO software for implementing the CSDDD and LkSG in action!