Article 7: Integrating due diligence into company policies and risk management systems

Beata Faracik

Chapter 7 in Sustainable Business in Europe, 2026, pp 89-108 from Edward Elgar Publishing

Abstract: This contribution analyses Article 7 of the Corporate Sustainability Due Diligence Directive (CSDDD), focusing on the requirement for companies to integrate human rights and environmental due diligence (HREDD) into their policies and risk management systems. Article 7 mandates both structural integration and the adoption of a dedicated due diligence policy, outlining its content, development process, and update mechanisms. The commentary positions these obligations within the broader international framework defined by the UN Guiding Principles on Business and Human Rights and the OECD Guidelines, while highlighting the practical challenges and interpretive ambiguities of the directive. The analysis critiques the prescriptive nature of the provisions and calls for pragmatic and operationally sound approaches that reflect the diversity of company structures and maturity levels, while stressing the importance of aligning internal practices with external commitments. The text concludes by situating Article 7 within evolving EU regulatory and reporting frameworks, underscoring the need for coherence across corporate governance, sustainability, and human rights agendas.

Keywords: Due Diligence Policy Rights and Environmental Due Diligence; Code of Conduct; Corporate Risk Management; Policy Integration; Stakeholder Engagement; Human Rights and Environmental Due Diligence (HREDD); Business and Human Rights (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035326891
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