Why Social Value Canada is Watching the EU’s New Corporate Sustainability Due Diligence Guidelines
Last week, Social Value Canada endorsed Social Value International's submission to the European Commission's public consultation on the guidelines for the EU Corporate Sustainability Due Diligence Directive, known as the CSDDD.
What is the CSDDD, and why should Canadians care
The CSDDD is EU legislation that requires large companies to identify, prevent, mitigate and account for the adverse human rights and environmental impacts of their operations, both inside and outside Europe. It marks one of the most significant shifts yet in how governments are turning corporate sustainability from a voluntary practice into a legal duty.
Since then, the Directive has been revised. In February 2026, the EU adopted an 'Omnibus' simplification package that narrowed its scope, reduced liability exposure, and pushed compliance out to July 2029. Even in its narrowed form, the CSDDD still sets legal due diligence obligations for very large companies operating in or trading with the EU market, including non-EU companies with a significant footprint there.
The European Commission is now developing detailed guidelines to help companies meet those obligations, and the current consultation on those guidelines closes on August 14, 2026.
This matters for Canada. As due diligence expectations continue to strengthen globally, Canadian companies that operate in or trade with the EU, along with the practitioners who support them, will increasingly need to understand and apply these standards. This consultation is a chance to help shape guidance that will influence due diligence practice for years to come.
What SVI recommended, and why SVC supports it
SVI's central recommendation is that the guidelines direct companies to embed due diligence into a recognised management system and into how decisions are actually made, rather than adding further standalone reporting requirements.
SVC supports this approach for three reasons.
It gives companies a repeatable, auditable way to identify, prevent, mitigate and remediate adverse impacts on people and the environment, rather than treating due diligence as a separate reporting exercise.
It gives supervisors and affected people a consistent basis for trust and accountability, grounded in how decisions are actually made, rather than in isolated, one off disclosures that may not reflect real practice.
It allows the level of rigour applied to be proportionate to the significance of the decision at hand, supporting the proportionality this consultation is seeking to achieve.
A note on language: "people affected," not "stakeholders"
Our submission also raises a point on terminology. We recommend that the guidelines refer to "people affected" rather than "stakeholders" wherever that is what is meant. There is a growing tendency among companies to treat "stakeholder" as a term they can define and apply selectively, which risks obscuring who is actually meant to be heard.
This distinction carries particular weight in the Canadian context, where the difference between who is considered a stakeholder and who is directly affected, particularly for Indigenous peoples, is well established and consequential. Precise terminology here would strengthen accountability to those the Directive is intended to protect.
Looking ahead
As the Commission finalizes its guidelines, the practices that emerge from this process are likely to shape expectations well beyond the EU's borders. For SVC members working with companies that trade in or with Europe, this is a space worth watching, and one where social value practitioners have a genuine role to play in shaping what good due diligence looks like in practice.