The EU’s sustainability framework is becoming a “de facto” global standard. Even non-EU companies with significant EU revenue or listings are being pulled into its orbit. Two flagship regulations are central:

• Corporate Sustainability Due Diligence Directive (CSDDD / CS3D) – imposes mandatory human-rights and environmental due diligence across global value chains.
• Corporate Sustainability Reporting Directive (CSRD) – requires in-scope companies to publish detailed sustainability reports under the European Sustainability Reporting Standards (ESRS).

Recent political compromises and an “omnibus” adjustment package have narrowed the scope, raised thresholds, and delayed some obligations, but the direction of travel remains clear: large companies will be expected to know and disclose their impacts on people and planet – and demonstrate credible governance and action.

The UN Global Compact (UNGC) Ten Principles provide the values backbone that EU rules are now operationalizing in law – especially around:

• Human rights & labor – avoid complicity in abuses; eliminate forced and child labour; uphold freedom of association and collective bargaining.
• Environment – precautionary approach, improved environmental performance, diffusion of green technologies.
• Anti-corruption – zero tolerance of bribery and corruption.

Purpose & scope:

• Applies to large EU and certain non-EU companies above thresholds of employees and turnover; focus is on high-impact sectors and significant EU operations (note: thresholds and timelines are being raised and pushed back, but the core due diligence concept remains).
• Requires companies to identify, prevent, mitigate and bring to an end actual and potential adverse impacts on human rights (including forced labor) and the environment across their own operations, subsidiaries, and value chains.

Key obligations relevant to forced labor:

• Embed due diligence in policies and risk management systems (codes of conduct, supplier standards, contractual cascades).
• Conduct ongoing risk-based due diligence: map value chains, prioritize salient risks (e.g., forced labor in cotton, cocoa, textiles, mining), engage with stakeholders, and track effectiveness.
• Prepare and implement a climate transition plan aligned with 1.5°C (still referenced in many analyses, even as politics around transition-plan requirements evolve).
• Establish complaints mechanisms and provide remediation where harm has occurred.

What CSRD does

• Dramatically expands the number of companies required to publish annual sustainability reports, in management-report format, using ESRS and digital (XBRL) tagging.
• Introduces double materiality: companies must report both how sustainability issues affect the business (financial materiality) and how the business affects people and environment (impact materiality).
• Requires limited (and later reasonable) assurance by auditors.

Value chain & workers focus

• ESRS standards (e.g., S1–S5) require disclosure on own workforce, value-chain workers, affected communities, and business conduct. ESRS S5 explicitly targets workers in the value chain and their exposure to human rights risks (including forced labour).