CSDDD: Turn compliance into competitive edge 

Global expectations of businesses are shifting fast. Sustainability, regulatory compliance and due diligence are becoming business-critical, and for many organisations – especially Asian corporates connected to European and US markets – the pressure is rising. 

From the Corporate Sustainability Reporting Directive (CSRD), the International Sustainability Standards Board (ISSB) framework, to the European Union Deforestation Regulation (EUDR), or laws on forced labour and modern slavery – each requirement can feel like a separate, complex task. Disconnected. Overwhelming.   

But step back, and a different picture emerges. The Corporate Sustainability Due Diligence Directive (CSDDD) offers a way to bring it all together. CSDDD introduces a unifying, rights-based, people-focused approach – one that empowers companies to understand and address their impact on people, not just tick boxes.  

By adopting CSDDD as a common framework, Asian corporates can do more than meet compliance demands. They can align their efforts and turn regulatory challenges into competitive advantage.   

A shifting, fragmented landscape 

The regulatory landscape may be complex and shifting. But the direction is clear. 

In Europe, efforts to simplify sustainability rules are focused on reducing duplication – not on diluting the substance. Recent iterations of the Carbon Border Adjustment Mechanism, CSRD and EUDR demonstrate this.  

In the US, we’re seeing increased business volatility and a regulatory environment in flux. Tariffs are disrupting supply chains and exposing businesses to additional risks. At the same time, existing regulations such as sanctions against forced labour continue to make their mark.  

For Asian businesses, the challenge is to respond confidently across multiple fronts: 

• Reporting (CSRD, ISSB) 

• Due diligence (CSDDD, EUDR) 

• Performance (avoidance of forced labour) 

• Tax and traceability (CBAM, digital product passports) 

And there’s likely more to come. But instead of reacting regulation by regulation, there’s a better way.   

Zoom out. Connect the dots. Move forward. 

CSDDD provides a powerful lens to align your efforts and unlock strategic value. At its heart, it’s about understanding your impact on people and the environment – and acting on it across your operations, subsidiaries and value chain. 

If that sounds ambitious, it is. But you’re not starting from scratch. 

Many Asian corporates already have strong foundations – across human resources, health and safety, environmental management, procurement and supply chain. The key now is to connect those systems and focus them through a shared purpose. 

The principles underpinning the CSDDD can be best expressed by asking: 

• Where do we affect people and communities, directly or indirectly? 

• Where are we exposed to risks – or better still, where are the opportunities to lead? 

• How can we design systems that embed resilience and responsibility? 

As you explore these questions, it will become clear how CSDDD can bring siloed efforts together into one cohesive strategy.    

Three actions to accelerate your impact – in line with the CSDDD framework. 

1. Anchor your strategy in purpose. 

Make human rights and environmental responsibility part of how you define success – integrated into your business strategy.   

2. Break down silos and build connections.  

Link existing systems across departments and rethink how collaboration happens. Use digital tools and traceability to bring it all together – and explore how Business Model Reinvention can help you go further.    

3. Build through due diligence processes.  

Risks are surfaced early and managed consistently, within your own operations, subsidiaries and throughout your value chain. This isn’t just about avoiding harm – it’s about doing business better.   

What you stand to gain 

Leaning into CSDDD-aligned practices doesn’t just help you meet regulatory expectations. It builds long-term value: 

• Enhanced market position and brand reputation: It can bolster your brand's reputation, be this with consumers or your B2B customers, by demonstrating a commitment to sustainability and ethical practices. This enhanced reputation can differentiate your business in competitive markets. 

• Access to markets and avoidance of trade restrictions: With stricter regulations on the horizon, aligning with CSDDD can open up new market opportunities and help avoid potential trade restrictions that might be imposed on non-compliant businesses. 

• Resilience and future ready against regulatory risks: Stay ahead of evolving regulations, reducing the risk of non-compliance and associated penalties.  

Your next step starts now 

With the right guidance, mindset and approach, CSDDD becomes a powerful tool to help your business thrive. 

PwC CSDDD Readiness Accelerator helps you assess where you stand and where to focus next, guiding you through key considerations, such as: 

 1. A focus on people and your operating environment  

• Set your standards for a shared understanding: Do you have a risk-based human rights and environmental due diligence policy that includes a code of conduct?  

• Gather insight via your stakeholder engagement strategy: Do you have such at strategy or plan to inform your approach and enable meaningful engagement?  

• Align internal leadership: Does your cross-functional team understand the purpose and intent you seek to achieve?   

2. Understanding business impacts  

• Identifying impacts: Have you identified your actual and potential human rights and environmental impacts across your own operations, the operations of your subsidiaries, and the operations of your business partners?  

• Evaluate purchasing practices: Have you evaluated the impact of your own purchasing practices on your supply chain?   

• Identify, resolve and avoid impacts through an enabled grievance mechanism: Do you have an operational grievance mechanism and an external grievance mechanism accessible to stakeholders across your own operations, subsidiaries and business partners?   

3. Managing and avoiding impacts  

• Drive efficiency through integration across management systems: Have you integrated your human rights and environmental due diligence policy across all relevant risk management systems?  

• Enable alignment via supplier and business partner engagement: Have you addressed actual and potential human rights and environmental impacts through supplier engagement, contractual assurances, modifications to your operations, or collaboration with stakeholders?  

• Reduce risk and enable remedy: Do you provide remedies for actual human rights and environmental impacts that you cause or jointly cause?  

• Refine your value chain and set responsible disengagement protocols: Do you have a process for responsibly disengaging with business partners when actual or potential human rights and environmental impacts cannot be avoided?   

4. Application across operations and value chain  

• Learn, evaluate and assess your effectiveness: Do you have a process in place to evaluate the effectiveness of your operations and approaches to adverse impacts?  

• Proliferate your approach: Starting with your own operations and subsidiaries, are you proliferating these approaches across your value chain?   

The structure, as outlined above, offers a strategic overview – helping you connect each question to broader organisational goals and actions.  

Get in touch if you would like to learn more about our CSDDD Readiness Accelerator and how it can support your next steps. We’ll help you move forward with clarity, confidence – and competitive advantage.