As part of The Lisbon MBA, within the Action Learning program, a consulting project was carried out on one of today’s most pressing business topics: ESG (Environmental, Social, and Governance). Specifically, an assessment was conducted for a major Portuguese company on the upcoming Corporate Sustainability Due Diligence Directive (CSDDD), also known as the EU due diligence directive.

The CSDDD is a European legislative initiative that seeks to ensure companies take responsibility for both their environmental impact and human rights practices across their operations and supply chains. On the environmental side, it emphasizes reducing harm to the planet, such as preventing pollution, addressing climate change, and protecting biodiversity. On the social side, it requires companies to ensure fair labor practices, prevent child and forced labor, and respect fundamental human rights not only within their own operations but also among their suppliers and business partners.

While the directive is still under negotiation at the EU level, its ambition is clear: companies will be expected to integrate sustainability and human rights due diligence into their core strategy, governance, and reporting. The implications are profound - companies must monitor and address risks across complex global supply chains, a task that demands significant preparation, resources, and coordination.

The consulting project revealed just how demanding and transformative this directive will be. One of the main challenges lies in managing suppliers and gaining full visibility over extended supply networks. This requires companies to go beyond compliance and build robust systems for risk identification, monitoring, and remediation. Many organizations are not yet ready for this level of oversight, which is why starting early is essential. Despite the political uncertainties surrounding its approval, it is clear that companies cannot afford to wait.

To support the company’s preparation, a roadmap was designed. The work began with a detailed analysis of the CSDDD text and a benchmark of best practices across industries. A supplier risk assessment followed, aimed at identifying potential vulnerabilities in the value chain. Based on this analysis, a step-by-step approach was developed to help the company gradually align with the directive, from governance structures and policy updates to supplier engagement and monitoring tools.

This experience demonstrated that, while complex, the directive plays a crucial role in shaping a more responsible business environment. It creates the conditions for companies to address not only their environmental footprint but also their social responsibilities, ensuring that progress goes beyond financial performance.

In conclusion, even though the CSDDD is not yet finalized, its direction is clear, and the need for action is undeniable. Preparing early will allow companies to adapt smoothly, safeguard their reputation, and contribute to the broader goals of protecting both the planet and human rights. For MBA students, this project was not only a valuable learning experience but also a meaningful reminder of the role business can and must play in building a more sustainable and fair future.

And yet, here lies the real provocation: if companies already recognize the importance of protecting human rights and the environment, why wait for a directive to force the change?

Have a great and impactful week!

Catarina Martins & Simão Oom de Sousa Lisbon MBA Students