Accountancy Europe has submitted its response to the European Commission’s (EC) public consultation on the Guidelines for the Corporate Sustainability Due Diligence Directive (CSDDD).
Our response focuses on selected questions related to the effective use and governance of digital tools, practical support for SMEs, and robust and independent third-party verification.
Technology evolves rapidly, guidelines should guide effective tool use, not specify which tools to use. The guidelines should explain how companies should select, govern and use digital tools effectively. There is no one-size-fits-all solution, as appropriate tools depend on the value chain, sector, geography and sustainability issues. Technology sovereignty risks and reliance on non-EU technology providers should also be considered. Responsibility cannot be delegated to technology.
One key challenge is ensuring the auditability and transparency of digital tools. Where tools operate as “black boxes”, it may be difficult to understand how conclusions were reached or assess whether the underlying data are reliable. Companies therefore need appropriate governance, including documentation, traceability of outputs and human oversight. Interoperability between systems also remains a challenge.
Rather than developing additional standalone tools, the priority should be improving interoperability between existing systems and reducing duplication of reporting requirements. Tools supporting risk prioritisation, horizon scanning, scenario analysis and assessing the effectiveness of due diligence processes over time would be beneficial. This would support a stronger focus on outcomes, governance and continuous improvement. The market should continue to drive technological innovation, while the guidelines should focus on enabling effective use of digital tools.
The most cost-effective support measures are practical, proportionate and scalable. This means clear guidance, sector-specific examples, standardised templates, and digital tools aligned with existing reporting processes. Capacity-building through accountants and SME advisers can further reduce costs. Where SMEs are critical to the in-scope business, targeted financial and technical support can enable effective prevention and corrective action.
Independence should exist in fact and appearance. Verifiers should be free from conflicts of interest, should not verify systems they designed or implemented, should have robust ethics, independence and quality management arrangements. Internationally recognised quality management principles, such as those applied in assurance engagements, provide useful benchmarks and should apply on a level playing field to all verification providers.
Verifiers should combine expertise in human rights or environmental matters with competencies in governance, risk assessment, internal controls, evidence gathering, assurance methodologies. Assessing whether due diligence processes operate effectively is as important as technical knowledge. Assurance, sector expertise, local knowledge and stakeholder engagement experience should match the adverse impacts assessed. The guidance should ensure a level playing field across verification providers.
The guidelines should reflect internationally recognised principles for ethics, independence, quality management and competence. Accountability requires technical expertise, documented methodologies, review procedures, robust governance, quality controls, and effective challenge mechanisms. Established professions, such as statutory auditors, already operate under standards, methodologies and independence requirements. The guidelines should build on these rather than reinvent the wheel.
