Design principles for corporate sustainability due Diligence: An investigation with expert interviews

Abstract

In May 2024, the European Union finalized and adopted the corporate sustainability due diligence directive, which mandates large companies to enforce human rights and environmental standards throughout their value chains. This directive introduces significant challenges, particularly in multi-tier supply chains, where limited visibility amplifies the problem of monitoring social and environmental sustainability throughout the supply chain. This paper explores how companies can effectively implement this directive within procurement and supply chain management. Given the exploratory nature of the topic, we used design science research as a methodology. Through 33 expert interviews, we identified 32 specific requirements and 5 use cases, and we developed 7 practical design principles essential for the implementation of the directive. Drawing from stakeholder theory and dynamic capabilities theory, we deepen the understanding of mandatory sustainability compliance and organizational capability development. We provide actionable guidance for companies, offering concrete solutions for impactful corporate sustainability.