Specific Obligation Cases Within the Scope of the Due Diligence Obligation (Summary)

Which steps the due diligence obligation covers

Companies must observe the human-rights-related and environmental due diligence obligations set out in the Act in order to prevent or minimise human-rights-related and environmental risks in their supply chains, or to bring violations of human rights or environmental obligations to an end. The due diligence obligation comprises:

1. establishing a risk management system (Article 4(1));
2. determining internal responsibility within the company (Article 4(3));
3. carrying out regular risk analysis (Article 5);
4. issuing a policy statement (Article 6(2));
5. putting appropriate preventive measures in place within the company’s own business area (Article 6(1) and (3)) and towards direct suppliers (Article 6(4));
6. taking remedial measures  (Article 7(1) to (3));
7. establishing a complaints procedure (Article 8);
8. applying the due diligence obligation to risks arising from indirect suppliers (Article 9); and
9. documentation (Article 10(1)) and reporting (Article 10(2)).

How the appropriate manner of conduct is determined

What conduct is appropriate to the due diligence obligation is determined, under the Act, by:

• the type and scope of the company’s activities;
• the company’s ability to influence the party that gives rise to a human-rights-related or environmental risk, or that directly brings about the violation of a human-rights-related or environmental obligation;
• the severity that the violation would typically be expected to have, whether it can be reversed, and how likely it is that a human-rights-related or environmental obligation will be violated; and
• the nature of the company’s causal contribution (causality) to the human-rights-related or environmental risk, or to a human-rights-related or environmental obligation.

The Directive’s approach: appropriate measures

The Directive works instead with a definition of “appropriate measures” and, unlike the Act, does not list the measures one by one. “Appropriate Measures” is necessarily the broader notion, taking shape according to the circumstances of each case. The definition runs as follows:

An “Appropriate Measure” is any measure the company may employ in the exercise of reasonable discretion, commensurate with the degree of severity and the occurrence of the harmful effect, that will serve the aim of fulfilling the due diligence obligation. What is reasonable is determined by the features of the individual case, the particular business relationship, the characteristics of the sector concerned, the company’s influence, and whether a priority measure must be taken.

The Act and the Directive: where things stand

The Act regulates the specific instances of the due diligence obligation more concretely, and the Act has been in force since 01.01.2023. The Directive should not be left out of account either. The instances it governs are not always arranged in the same order or on the same system, but they are almost identical to those in the Act. The Directive’s climate transition plan provision, Article 22, was repealed in full by the Omnibus I directive ((EU) 2026/470) adopted in February 2026; because the Directive first applies on 26 July 2029, that article will never have applied to any company.