Corporate Due Diligence, Auto Industry, and Battery Supply Chains

Vaios Triantafyllou, Anthony Cheng and Beia Spiller
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Beia Spiller: Resources for the Future

No 25-15, RFF Reports from Resources for the Future

Abstract: Within the European Union, Multinational Enterprises and their global supply chains are increasingly under scrutiny as consumers and governments demand higher environmental and social standards. In particular, as the green transition accelerates, industries that rely on critical minerals face growing pressure to ensure that their operations are both sustainable and socially responsible. This report examines the implications of the European Union’s Corporate Sustainability Due Diligence Directive (CSDDD) for the automotive and battery supply chains, with a focus on how firms may respond to the new requirements. The CSDDD is a European Union-wide legislation, aiming to harmonize national-level due diligence laws that require firms to monitor, report, and address adverse human rights and environmental impacts across their supply chains. We outline the various margins of adjustment that firms have taken, including green investments and supplier monitoring, through digital tools and physical audits. However, we stress that the CSDDD does not specify sector-specific goals to be met by affected firms. Subsequently, we conclude that the directive has potential to transform supply chains, but risks being procedural if its implementation lacks rigorous, measurable targets to track both firm compliance and the aggregate effects of the legislation.

Date: 2025-09-25
New Economics Papers: this item is included in nep-ene, nep-env, nep-law and nep-ppm
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