EU regulators have made it clear that food companies should not rely on certification providers to meet their obligations regarding the Corporate Sustainability Due Diligence Directive – but can these programmes still contribute to compliance?
The Corporate Sustainability Due Diligence Directive came into force in July, bringing new requirements for food operators to identify and assess adverse human rights and environmental risks in their supply chains.
During the directive’s journey through the EU regulatory process, one of the discussion points has been the role of third party certifications such as Fairtrade, Marine Stewardship Council (MSC), and Rainforest Alliance.
The original draft text did not make it clear whether or not third party certifications would constitute evidence of best practices, sparking debate around this subject.
Some national governments were in favour of certifications being recognised as a form of due diligence, and pushed for exemption for companies who participate in such schemes. On the other side of the table were stakeholders who were opposed to any type of exemption and were concerned that unless it was explicitly stated otherwise, companies would be able to hide behind certifications rather than performing their own due diligence.
Early on in the process, it became apparent that an exemption would not be the direction taken by the European Council, and the text was revised to make it clear that third party certifications would not substitute internal due diligence practices.
Article 29, paragraph 4 of the published directive states: “Companies that have participated in industry or multi-stakeholder initiatives, or used independent third-party verification, or contractual clauses to support implementation of due diligence obligations may nevertheless be held liable in accordance with this Article.”
The certification organisations themselves were among those who were supportive of the Council’s decision not to offer exemption for companies participating in their schemes.
A spokesperson from the Rainforest Alliance told this publication: “We believe this is the right approach, since no certification programmes will ever replace the due diligence that companies have set up. This in line with ISEAL’s approach and we’ve been against exemptions from the very start.”
ISEAL is a global, non-profit membership organisation for credible sustainability standards.
This position is shared by other major certification bodies, including Fairtrade International and the MSC. A spokesperson from the latter said: “We welcome this legislation which clarifies businesses’ responsibilities and recognises that sustainability requires all stakeholders, including businesses, governments and NGOs, working together to bring about meaningful change.”
Article 29, paragraph 4 makes it clear that third party certifications will not be considered a substitute for human rights and environmental due diligence – but can they make any contribution to companies’ CSDDD compliance efforts?
The answer is ‘yes’, they might help companies demonstrate compliance or provide evidence of best practices, but companies must still do their own due diligence work, explained Marcelo Brull, sustainability manager at Informa Markets, the company behind the food ingredient trade show, Fi Europe, and the publisher of Fi Global Insights.
“It is not acceptable for food companies to shift responsibility to third parties by claiming that a certified product absolves them of accountability. As the company overseeing their supply chain, the responsibility to ensure compliance and address issues remains entirely with them, and it is essential they conduct the necessary due diligence and actively identify, prevent, mitigate, and remedy risks. Reliance on certification alone does not meet the full scope of due diligence required.”
He continued: “Companies can reference reputable certification schemes as part of their risk management strategies, but this should be viewed as part of a broader due diligence framework rather than a complete solution. This is because the risk might occur in areas of the supply chain that are not covered by a certain certification, or have social or environmental impacts that fall outside the scope of third party audit schemes, for example.”
The certification bodies interviewed for this article said they see their role as “supporting” companies in the fulfilment of their due diligence obligations.
“Businesses will need a comprehensive suite of tools to effectively meet their obligations, and certification is a part of this,” said the MSC’s spokesperson.
The Rainforest Alliance said it provides several tools that can support compliance with due diligence legislation whilst benefitting producers. These include assess and address mechanisms; risk assessments; access to data; and a free human rights due diligence course.
Similarly, Fairtrade International said it can support business partners and suppliers at each step of the human rights and environmental due diligence process. It offers, for example, expertise and guidance on salient human rights issues in global agricultural supply chains, as well as training, programmes, standards and auditing to address those issues.
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