Human Rights and Environmental Due Diligence in 2025

TL;DR

2025 brought major adjustments to global Human Rights and Environmental Due Diligence (HREDD) regulations: delays and scope reductions in the EU CSDDD, growing forced‑labor legislation in the US, Canada, Australia, and New Zealand, and updated timelines for the EU Deforestation Regulation (EUDR) and Batteries Regulation.

In 2026, companies must prepare for EU enforcement deadlines, guidance publications, and increasing supply chain transparency expectations worldwide.

Listen Now: Debating Key 2026 Changes in Due Diligence, Circularity, Carbon, and ESG Reporting

What It Means For 2026 And Beyond

Global requirements for Human Rights and Environmental Due Diligence (HREDD) continue to evolve. In 2025, businesses saw both deregulation and new regulatory initiatives affecting how they manage supply chain transparency, deforestation risk, and forced labor concerns.

Supply Chain Due Diligence: Key Developments in 2025

EU Corporate Sustainability Due Diligence Directive (CSDDD)

2025 was a challenging year for the EU CSDDD.

Major updates included:

• A one‑year delay through the “Stop‑the‑Clock” mechanism, shifting implementation to July 2029.

• In the USA, the Protect USA Act was proposed, which would have prohibited U.S. firms from complying with foreign sustainability due-diligence laws (including EU CSDDD).

• A new agreement under the 2025 ESG Omnibus Simplification Package raised thresholds to 5,000 employees and €1.5 billion turnover for EU companies, reducing the expected number of in‑scope companies by roughly 70%.

Simplifications included:

• Removal of the requirement for a climate transition plan.

• No harmonized EU‑wide liability regime.

• Penalties capped at 3% of global turnover (previously 4%).

• No mandatory full supply chain mapping; companies focus on areas with the most likely or severe adverse impacts.

Updated CSDDD Scope

National and Regional Updates

• Germany: Suspension of LkSG reporting obligations (except serious violations) until the CSDDD applies.

• Switzerland: Responsible Business Initiative aligned to move forward once EU CSDDD stabilizes.

• Taiwan: Draft Respect for Human Rights in Supply Chains program mandates HRDD from 2026 for listed manufacturers (>TWD 50 bn).

• South Korea: Reintroduction of the Corporate Human Rights and Environmental Due Diligence Act.

• EU Batteries Regulation (EUBR) supply chain due diligence requirements delayed to August 2027.

Child and Forced Labor Regulations

Global regulatory pressure increased across major markets:

• New Zealand: Draft Modern Slavery Reporting Bill for entities >NZD 50 million, with fines up to NZD 200,000.

• Australia: Consultation to strengthen the Modern Slavery Act and improve enforcement.

• USA: New high‑priority sectors added to the UFLPA (steel, copper, lithium, caustic soda, red dates).

• Canada: Review of 2024 modern slavery reports and evaluation of a proposed rebuttable presumption (Bill C‑251).

• UK: Updated Modern Slavery Act guidance; optional joint reporting template launched with Canada and Australia.

• EU: First convening of the Forced Labor Expert Group—an initial step ahead of the 2028 EU Forced Labor Regulation enforcement.

EU Deforestation Regulation (EUDR): Revised Timelines and Simplifications

Following review, the EUDR was delayed and simplified to reduce burden on operators. New Deadlines

• Medium and large operators: 30 December 2026

• Micro and small operators: 30 June 2027

Key Simplifications

• New category: Micro and small primary operators in low‑risk countries, with reduced due diligence requirements.

• Due Diligence Statement (DDS) required only for the upstream operator placing a product on the market for the first time.

  • Downstream operators no longer required to submit or maintain DDS numbers.

  • Micro and small primary operators may replace geolocation with postal addresses.

  • Printed products excluded from EUDR scope.

Other Relevant Legislation

• Illegal logging laws remain active in the USA, Australia, and UK.

• UK evaluating a Forest Risk Commodity Regulation for cattle (non‑dairy), cocoa, palm oil, and soy.

Exclusion

Printed products (ex 49), such as printed books, newspapers, pictures and other products of the printing industry, manuscripts, typescripts and plans, of paper, will no longer be in scope of the EUDR.

Illegal logging legislations remain in full force in the USA, Australia and UK. In the UK, discussions on a complementary Forest Risk Commodity Regulation for non-dairy cattle products, cocoa, palm oil and soy are ongoing.

What Does This Mean For Businesses In 2026?

Key regulatory milestones:

• EU Environmental Crime Directive to be transposed by 21 May 2026—covering environmental violations linked to the EUDR.

• EU Forced Labor Database and Guidelines by 14 June 2026—companies must prepare for compliance from 2028 onwards.

• EU Batteries Supply Chain Due Diligence Guidance by 26 July 2026—mandatory from August 2027.

• EUDR implementation for medium & large operators by 30 December 2026.

• Additional EUDR simplifications expected by 30 April 2026.

What Companies Should Do Now

Supply chain due diligence supports not only HREDD requirements but also product compliance, carbon reporting, and extended producer responsibility obligations.

Recommended actions:

• Map supply chains to the raw material level to support EUDR, Digital Product Passport, CBAM, food safety, chemical restrictions, and EPR frameworks.

• Engage suppliers early to avoid delays in meeting 2026–2027 deadlines.

• Integrate cross departmental teams—procurement, sustainability, compliance, quality—to streamline data flows and reduce duplicate efforts.

• Establish continuous monitoring processes for human rights, labor rights, environmental and forced labor risks, ESG disclosures, and deforestation related data.

• Use technology-driven traceability solutions for risk detection, documentary compliance, and audit readiness.

For support implementing HREDD, supply chain mapping, and product compliance programs, QIMA provides global solutions that help companies accelerate compliance and improve supply chain performance.

FAQ

What is Human Rights and Environmental Due Diligence (HREDD)?  HREDD refers to the processes companies use to identify, prevent, mitigate, and report adverse environmental and human rights impacts in their operations and supply chains.

Which companies will fall under the EU CSDDD after the 2025 revision?  Only large EU companies with 5,000+ employees and €1.5 billion turnover, nonEU companies generating €1.5 billion in EU turnover, and certain franchise/licensor models.

When does the EU Deforestation Regulation apply?  Medium and large operators must comply by 30 December 2026; micro and small operators by 30 June 2027.

How should companies prepare for EUDR?  Businesses should collect geolocation/postal data, engage suppliers, validate traceability records, and build risk assessment workflows ahead of the 2026 deadline.