Sustainability due diligence

Sustainability due diligence refers to the application of due diligence to sustainability-related impacts. It builds on frameworks such as the OECD Guidelines, the UN Guiding Principles (UNGPs), and the Corporate Sustainability Due Diligence Directive (CSDDD). In these frameworks, due diligence refers to a risk-based process through which a company identifies, assesses, prevents, mitigates, and accounts for adverse impacts related to its activities, business relationships, and operations.

In practice, the term may refer to a process, a standard of care, or a legal or contractual obligation. This variation in meaning may create confusion when translating sustainability-related contract content into operational processes and day-to-day activities. In contracts, sustainability due diligence is often expressed through broad or abstract clauses (e.g. “comply with applicable laws” or “conduct due diligence”) that may remain difficult to interpret or implement. See also sustainabilitese and duediligencese.