[Home](/)/[Resources](/resources)/EU Supply Chain Due Diligence CSDDDsupply chainESGhuman rights # EU Corporate Sustainability Due Diligence Directive: Impact on Hardware Supply Chains The EU CSDDD (Directive 2024/1760) begins applying to large EU and non-EU companies from 2027. For hardware manufacturers, it introduces a new category of compliance obligation: active due diligence across the entire supply chain for human rights violations and environmental impacts — from mineral extraction through manufacturing to end of life. Copy Link[Share on WhatsApp](https://wa.me/?text=https%3A%2F%2Fkrono-labs.com%2Fguides%2Feu-supply-chain-due-diligence) [Check my EU compliance requirements](/platform/new) Scope ## Which companies are subject to CSDDD CSDDD applies in phases based on company size. Phase 1 (from 26 July 2027): companies with more than 5,000 EU employees and global net turnover above EUR 1.5 billion; non-EU companies with EU-generated net turnover above EUR 1.5 billion. Phase 2 (from 26 July 2028): companies with more than 3,000 EU employees and turnover above EUR 900 million. Phase 3 (from 26 July 2029): companies with more than 1,000 EU employees and turnover above EUR 450 million. Hardware and electronics manufacturing is explicitly mentioned in the directive's recitals as a sector with significant supply chain exposure — particularly for mineral extraction (cobalt, lithium, rare earths), manufacturing labor practices, and electronic waste. Because large companies must conduct due diligence across their supply chains including their suppliers' suppliers, smaller hardware manufacturers who supply components or finished products to CSDDD-obligated buyers will face significant indirect pressure. Due diligence obligations ## What CSDDD requires in practice CSDDD due diligence is a proactive, ongoing process — not a one-time audit. Companies in scope must: integrate due diligence into policies (develop a corporate sustainability due diligence policy, updated annually and made publicly available); map the value chain (identify direct suppliers and, for high-risk sectors, go deeper to tier 2 and beyond); identify actual and potential adverse impacts (human rights violations or environmental impacts the company causes or is directly linked to through its business relationships); prevent and mitigate identified impacts; establish a complaints mechanism; and adopt a climate transition plan aligned with a 1.5°C pathway. For hardware, key supply chain exposure areas include: cobalt mining in DRC (child labor risk), palm oil in thermal interface materials (deforestation), manufacturing workplace safety in assembly facilities, and e-waste handling practices. These risks must be systematically identified and addressed, not just acknowledged in policy documents. Interaction with existing requirements ## How CSDDD relates to CSRD, CBAM, and conflict minerals CSRD (Corporate Sustainability Reporting Directive) requires disclosure of sustainability impacts; CSDDD requires active due diligence and remediation. They are complementary — CSRD creates transparency obligations; CSDDD creates action obligations. Companies subject to both must both report on their impacts and actively address them. EU Conflict Minerals Regulation (2021) covers 3TG supply chains (tin, tantalum, tungsten, gold) with specific OECD-based due diligence. CSDDD is broader — covering all supply chain impacts across all materials and labor practices. For hardware companies already doing 3TG diligence, CSDDD requires extending that systematic approach to the full supply chain. German Supply Chain Act (LkSG) and French Loi de vigilance already impose national due diligence obligations — CSDDD will supersede and harmonize these for in-scope companies from 2027 onwards. ## Learn this properly, not just for one product In-depth courses and books that teach the process — not a one-off answer you'll need to look up again next time. [Browse courses](/courses)See your free roadmap [Prefer to read? Get the book](/books) ## Frequently asked questions ### Does CSDDD apply to non-EU hardware companies? Yes. CSDDD applies to non-EU companies that generate net turnover in the EU above the applicable thresholds (EUR 1.5 billion from 2027, reducing to EUR 450 million by 2029). For hardware companies selling significant volumes in the EU, this is a real exposure. Non-EU companies subject to CSDDD must comply with the same due diligence obligations as EU companies, including value chain mapping and the climate transition plan. ### Do smaller hardware suppliers need to comply with CSDDD? CSDDD's direct obligations apply only to companies above the size and revenue thresholds. However, smaller suppliers who sell to large CSDDD-obligated buyers will face indirect pressure through buyer contract requirements, supplier questionnaires, and audit requests. The directive does not require buyers to immediately terminate relationships with non-compliant suppliers, but commercial leverage will drive significant cascading through supply chains. ### What are the penalties for CSDDD non-compliance? Member states must establish effective, proportionate, and dissuasive penalties. The directive requires penalties of at least 5% of global net turnover for serious violations. Civil liability for damages caused by failure to conduct required due diligence is explicitly created — companies that fail can be sued by affected parties for damages in EU member state courts. ### How does CSDDD interact with the EU Conflict Minerals Regulation for hardware? The EU Conflict Minerals Regulation covers 3TG supply chains (tin, tantalum, tungsten, gold) with specific OECD-based due diligence requirements. CSDDD is broader — it covers all supply chain human rights and environmental impacts, not just conflict minerals. For hardware companies already doing 3TG supply chain diligence, CSDDD requires extending that program to the broader supply chain including non-3TG materials, labor practices, and environmental impacts. 🇪🇺 CE Marking roadmap for your product Every standard, document, and test that applies — free, no account required. See your free roadmap[ Want an expert to take your product through 🇪🇺 CE Marking compliance for you? One consultant from Krono's compliance team takes your product from requirements to legal sale, with a fixed quote before any work starts. See compliance services](/services) Related guides * [EU Economic Operators ExplainedThe EU product safety framework assigns distinct compliance obligations to each economic operator in the supply chain.](/guides/eu-economic-operators-explained) * [EU Packaging RegulationEU Regulation 2025/40 introduces mandatory recycled content targets, recyclability requirements, packaging minimization obligat…](/guides/eu-packaging-regulation) * [EU New Product Liability DirectiveNew EU PLD (2024/2853) expands liability to software, firmware updates, and AI.](/guides/eu-new-product-liability-directive) * [Export Control and Dual-UseExport control regulations — including the EU Dual-Use Regulation, US EAR (Export Administration Regulations), and US ITAR — re…](/guides/export-control-dual-use) * [EU Digital Product PassportThe EU Digital Product Passport is a core element of the Ecodesign for Sustainable Products Regulation (ESPR).](/guides/eu-digital-product-passport) * [Hong Kong ESG and Supply Chain ReportingHKEX ESG Reporting Guide obligations for listed electronics and hardware companies: mandatory KPIs, supply chain due diligence disclosure, Scope 3 emissions, and the transition to IFRS S1/S2 climate reporting.](/guides/hong-kong-esg-supply-chain-reporting) Educational resource only. CSDDD implementation timelines and national transposition details are subject to change. Verify current requirements with qualified sustainability and legal professionals.