### (21) under this directive , eu companies with more than 500 employees on average and a worldwide net turnover exceeding eur 150 million in the financial year preceding the last financial year should be required to comply with due diligence. as regards companies which do not fulfil those criteria , but which had more than 250 employees on average and more than eur 40 million worldwide net turnover in the financial year preceding the last financial year and which operate in one or more high-impact sectors , due diligence should apply 2 years after the end of the transposition period of this directive , in order to provide for a longer adaptation period. in order to ensure a proportionate burden , companies operating in such high-impact sectors should be required to comply with more targeted due diligence focusing on severe adverse impacts. temporary agency workers , including those posted under article 1(3) , point (c) , of directive 96/71/ec , as amended by directive 2018/957/eu of the european parliament and of the council103 , should be included in the calculation of the number of employees in the user company. posted workers under article 1(3) , points (a) and (b) , of directive 96/71/ec , as amended by directive 2018/957/eu , should only be included in the calculation of the number of employees of the sending company. ### (21) under this directive , eu companies with more than 500 employees on average and net turnover in the union exceeding eur 150 million in the financial year preceding the last financial year should be required to comply with due diligence. as regards companies which do not fulfil those criteria , but which had more than 250 employees on average and more than eur 40 million net turnover in the union in the financial year preceding the last financial year and which operate in one or more high-impact sectors , due diligence should apply 2 years after the end of the transposition period of this directive , in order to provide for a longer adaptation period. in order to ensure a proportionate burden , companies operating in such high-impact sectors should be required to comply with more targeted due diligence focusing on severe adverse impacts. temporary agency workers , including those posted under article 1(3) , point (c) , of directive 96/71/ec , as amended by directive 2018/957/eu of the european parliament and of the council103 , should be included in the calculation of the number of employees in the user company. posted workers under article 1(3) , points (a) and (b) , of directive 96/71/ec , as amended by directive 2018/957/eu , should only be included in the calculation of the number of employees of the sending company.


### (21) under this directive , eu companies with more than 500 employees on average and a worldwide net turnover exceeding eur 150 million in the financial year preceding the last financial year should be required to comply with due diligence. as regards companies which do not fulfil those criteria , but which had more than 250 employees on average and more than eur 40 million worldwide net turnover in the financial year preceding the last financial year and which operate in one or more high-impact sectors , due diligence should apply 2 years after the end of the transposition period of this directive , in order to provide for a longer adaptation period. in order to ensure a proportionate burden , companies operating in such high-impact sectors should be required to comply with more targeted due diligence focusing on severe adverse impacts. temporary agency workers , including those posted under article 1(3) , point (c) , of directive 96/71/ec , as amended by directive 2018/957/eu of the european parliament and of the council103 , should be included in the calculation of the number of employees in the user company. posted workers under article 1(3) , points (a) and (b) , of directive 96/71/ec , as amended by directive 2018/957/eu , should only be included in the calculation of the number of employees of the sending company. ### (21) under this directive , eu companies with more than 500 employees on average and a worldwide net turnover exceeding eur 150 million in the financial year preceding the last financial year should be required to comply with due diligence. temporary agency workers , including those posted under article 1(3) , point (c) , of directive 96/71/ec , as amended by directive 2018/957/eu of the european parliament and of the council103 , should be included in the calculation of the number of employees in the user company. posted workers under article 1(3) , points (a) and (b) , of directive 96/71/ec , as amended by directive 2018/957/eu , should only be included in the calculation of the number of employees of the sending company.


### (21) under this directive , eu companies with more than 500 employees on average and a worldwide net turnover exceeding eur 150 million in the financial year preceding the last financial year should be required to comply with due diligence. as regards companies which do not fulfil those criteria , but which had more than 250 employees on average and more than eur 40 million worldwide net turnover in the financial year preceding the last financial year and which operate in one or more high-impact sectors , due diligence should apply 2 years after the end of the transposition period of this directive , in order to provide for a longer adaptation period. in order to ensure a proportionate burden , companies operating in such high-impact sectors should be required to comply with more targeted due diligence focusing on severe adverse impacts. temporary agency workers , including those posted under article 1(3) , point (c) , of directive 96/71/ec , as amended by directive 2018/957/eu of the european parliament and of the council103 , should be included in the calculation of the number of employees in the user company. posted workers under article 1(3) , points (a) and (b) , of directive 96/71/ec , as amended by directive 2018/957/eu , should only be included in the calculation of the number of employees of the sending company. ### (21) under this directive , eu companies with more than 500 employees on average and a worldwide net turnover exceeding eur 150 million in the financial year preceding the last financial year should be required to comply with due diligence. as regards companies which do not fulfil those criteria , but which had more than 250 employees on average and more than eur 50 million worldwide net turnover in the financial year preceding the last financial year and which operate in one or more high-impact sectors , due diligence should apply 4 years after the end of the transposition period of this directive , in order to provide for a longer adaptation period. in order to ensure a proportionate burden , companies operating in such high-impact sectors should be required to comply with more targeted due diligence focusing on severe adverse impacts. temporary agency workers , including those posted under article 1(3) , point (c) , of directive 96/71/ec , as amended by directive 2018/957/eu of the european parliament and of the council103 , should be included in the calculation of the number of employees in the user company. posted workers under article 1(3) , points (a) and (b) , of directive 96/71/ec , as amended by directive 2018/957/eu , should only be included in the calculation of the number of employees of the sending company.


### (21) under this directive , eu companies with more than 500 employees on average and a worldwide net turnover exceeding eur 150 million in the financial year preceding the last financial year should be required to comply with due diligence. as regards companies which do not fulfil those criteria , but which had more than 250 employees on average and more than eur 40 million worldwide net turnover in the financial year preceding the last financial year and which operate in one or more high-impact sectors , due diligence should apply 2 years after the end of the transposition period of this directive , in order to provide for a longer adaptation period. in order to ensure a proportionate burden , companies operating in such high-impact sectors should be required to comply with more targeted due diligence focusing on severe adverse impacts. temporary agency workers , including those posted under article 1(3) , point (c) , of directive 96/71/ec , as amended by directive 2018/957/eu of the european parliament and of the council103 , should be included in the calculation of the number of employees in the user company. posted workers under article 1(3) , points (a) and (b) , of directive 96/71/ec , as amended by directive 2018/957/eu , should only be included in the calculation of the number of employees of the sending company. ### (21) under this directive , eu companies with more than 5000 employees on average and a worldwide net turnover exceeding eur 500 million in the financial year preceding the last financial year should be required to comply with due diligence in their operations outside the eu. temporary agency workers , including those posted under article 1(3) , point (c) , of directive 96/71/ec , as amended by directive 2018/957/eu of the european parliament and of the council103 , should be included in the calculation of the number of employees in the user company except in the case of ships' crews , seasonal workers employed in the agriculture , livestock or fisheries sector , and temporary workers in the horeca sector. posted workers under article 1(3) , points (a) and (b) , of directive 96/71/ec , as amended by directive 2018/957/eu , should only be included in the calculation of the number of employees of the sending company.


### (21) under this directive , eu companies with more than 500 employees on average and a worldwide net turnover exceeding eur 150 million in the financial year preceding the last financial year should be required to comply with due diligence. as regards companies which do not fulfil those criteria , but which had more than 250 employees on average and more than eur 40 million worldwide net turnover in the financial year preceding the last financial year and which operate in one or more high-impact sectors , due diligence should apply 2 years after the end of the transposition period of this directive , in order to provide for a longer adaptation period. in order to ensure a proportionate burden , companies operating in such high-impact sectors should be required to comply with more targeted due diligence focusing on severe adverse impacts. temporary agency workers , including those posted under article 1(3) , point (c) , of directive 96/71/ec , as amended by directive 2018/957/eu of the european parliament and of the council103 , should be included in the calculation of the number of employees in the user company. posted workers under article 1(3) , points (a) and (b) , of directive 96/71/ec , as amended by directive 2018/957/eu , should only be included in the calculation of the number of employees of the sending company. ### (21) under this directive , eu companies with more than 500 employees on average and a worldwide net turnover exceeding eur 150 million in the financial year preceding the last financial year should be required to comply with due diligence. as regards companies which do not fulfil those criteria , but which had more than 250 employees on average and more than eur 40 million worldwide net turnover in the financial year preceding the last financial year and which operate in one or more high-impact sectors , a simplified due diligence reporting obligation should apply 2 years after the end of the transposition period of this directive , in order to provide for a longer adaptation period. in order to ensure a proportionate burden , companies operating in such high-impact sectors should be required to comply with more targeted due diligence focusing on severe adverse impacts. temporary agency workers , including those posted under article 1(3) , point (c) , of directive 96/71/ec , as amended by directive 2018/957/eu of the european parliament and of the council103 , should be included in the calculation of the number of employees in the user company. posted workers under article 1(3) , points (a) and (b) , of directive 96/71/ec , as amended by directive 2018/957/eu , should only be included in the calculation of the number of employees of the sending company.


### (22) in order to reflect the priority areas of international action aimed at tackling human rights and environmental issues , the selection of high-impact sectors for the purposes of this directive should be based on existing sectoral oecd due diligence guidance. the following sectors should be regarded as high-impact for the purposes of this directive: the manufacture of textiles , leather and related products (including footwear) , and the wholesale trade of textiles , clothing and footwear; agriculture , forestry , fisheries (including aquaculture) , the manufacture of food products , and the wholesale trade of agricultural raw materials , live animals , wood , food , and beverages; the extraction of mineral resources regardless of where they are extracted from (including crude petroleum , natural gas , coal , lignite , metals and metal ores , as well as all other , non-metallic minerals and quarry products) , the manufacture of basic metal products , other non-metallic mineral products and fabricated metal products (except machinery and equipment) , and the wholesale trade of mineral resources , basic and intermediate mineral products (including metals and metal ores , construction materials , fuels , chemicals and other intermediate products). as regards the financial sector , due to its specificities , in particular as regards the value chain and the services offered , even if it is covered by sector-specific oecd guidance , it should not form part of the high-impact sectors covered by this directive. at the same time , in this sector , the broader coverage of actual and potential adverse impacts should be ensured by also including very large companies in the scope that are regulated financial undertakings , even if they do not have a legal form with limited liability. ### (22) in order to reflect the priority areas of international action aimed at tackling human rights and environmental issues , the selection of high-impact sectors for the purposes of this directive should be based on existing sectoral oecd due diligence guidance. the following sectors should be regarded as high-impact for the purposes of this directive: the manufacture of textiles , leather and related products (including footwear) , and the wholesale trade of textiles , clothing and footwear; agriculture , forestry , fisheries (including aquaculture) , the manufacture of food products , and the wholesale trade of agricultural raw materials , live animals , wood , food , and beverages; the extraction of mineral resources regardless of where they are extracted from (including crude petroleum , natural gas , coal , lignite , metals and metal ores , as well as all other , non-metallic minerals and quarry products) , the manufacture of basic metal products , other non-metallic mineral products and fabricated metal products (except machinery and equipment) , and the wholesale trade of mineral resources , basic and intermediate mineral products (including metals and metal ores , construction materials , fuels , chemicals and other intermediate products). the commission should , no later than two years after the entry into force of this directive , issue guidance describing in more detail which high-risk parts of the stated sectors are considered to be high-impact.


### (22) in order to reflect the priority areas of international action aimed at tackling human rights and environmental issues , the selection of high-impact sectors for the purposes of this directive should be based on existing sectoral oecd due diligence guidance. the following sectors should be regarded as high-impact for the purposes of this directive: the manufacture of textiles , leather and related products (including footwear) , and the wholesale trade of textiles , clothing and footwear; agriculture , forestry , fisheries (including aquaculture) , the manufacture of food products , and the wholesale trade of agricultural raw materials , live animals , wood , food , and beverages; the extraction of mineral resources regardless of where they are extracted from (including crude petroleum , natural gas , coal , lignite , metals and metal ores , as well as all other , non-metallic minerals and quarry products) , the manufacture of basic metal products , other non-metallic mineral products and fabricated metal products (except machinery and equipment) , and the wholesale trade of mineral resources , basic and intermediate mineral products (including metals and metal ores , construction materials , fuels , chemicals and other intermediate products). as regards the financial sector , due to its specificities , in particular as regards the value chain and the services offered , even if it is covered by sector-specific oecd guidance , it should not form part of the high-impact sectors covered by this directive. at the same time , in this sector , the broader coverage of actual and potential adverse impacts should be ensured by also including very large companies in the scope that are regulated financial undertakings , even if they do not have a legal form with limited liability. ### deleted


### (22) in order to reflect the priority areas of international action aimed at tackling human rights and environmental issues , the selection of high-impact sectors for the purposes of this directive should be based on existing sectoral oecd due diligence guidance. the following sectors should be regarded as high-impact for the purposes of this directive: the manufacture of textiles , leather and related products (including footwear) , and the wholesale trade of textiles , clothing and footwear; agriculture , forestry , fisheries (including aquaculture) , the manufacture of food products , and the wholesale trade of agricultural raw materials , live animals , wood , food , and beverages; the extraction of mineral resources regardless of where they are extracted from (including crude petroleum , natural gas , coal , lignite , metals and metal ores , as well as all other , non-metallic minerals and quarry products) , the manufacture of basic metal products , other non-metallic mineral products and fabricated metal products (except machinery and equipment) , and the wholesale trade of mineral resources , basic and intermediate mineral products (including metals and metal ores , construction materials , fuels , chemicals and other intermediate products). as regards the financial sector , due to its specificities , in particular as regards the value chain and the services offered , even if it is covered by sector-specific oecd guidance , it should not form part of the high-impact sectors covered by this directive. at the same time , in this sector , the broader coverage of actual and potential adverse impacts should be ensured by also including very large companies in the scope that are regulated financial undertakings , even if they do not have a legal form with limited liability. ### (22) in order to reflect the priority areas of international action aimed at tackling human rights and environmental issues , the selection of high-impact sectors for the purposes of this directive should be based on existing sectoral oecd due diligence guidance. as regards the financial sector , due to its specificities , in particular as regards the value chain and the services offered , even if it is covered by sector-specific oecd guidance , it should not form part of the high-impact sectors covered by this directive. at the same time , in this sector , the broader coverage of actual and , based on the state of knowledge , foreseeable adverse impacts should be ensured by also including very large companies in the scope that are regulated financial undertakings , even if they do not have a legal form with limited liability.


### (23) in order to achieve fully the objectives of this directive addressing human rights and adverse environmental impacts with respect to companies’ operations , subsidiaries and value chains , third-country companies with significant operations in the eu should also be covered. more specifically , the directive should apply to third-country companies which generated a net turnover of at least eur 150 million in the union in the financial year preceding the last financial year or a net turnover of more than eur 40 million but less than eur 150 million in the financial year preceding the last financial year in one or more of the high-impact sectors , as of 2 years after the end of the transposition period of this directive. ### (23) in order to achieve fully the objectives of this directive addressing human rights and adverse environmental impacts , third-country companies with significant operations in the eu should also be covered. more specifically , the directive should apply to third-country companies which generated a net turnover of at least eur 150 million in the union in the financial year preceding the last financial year or a net turnover of more than eur 40 million but less than eur 150 million in the financial year preceding the last financial year in one or more of the high-impact sectors , as of 2 years after the end of the transposition period of this directive.


### (23) in order to achieve fully the objectives of this directive addressing human rights and adverse environmental impacts with respect to companies’ operations , subsidiaries and value chains , third-country companies with significant operations in the eu should also be covered. more specifically , the directive should apply to third-country companies which generated a net turnover of at least eur 150 million in the union in the financial year preceding the last financial year or a net turnover of more than eur 40 million but less than eur 150 million in the financial year preceding the last financial year in one or more of the high-impact sectors , as of 2 years after the end of the transposition period of this directive. ### (23) in order to achieve fully the objectives of this directive addressing human rights and adverse environmental impacts with respect to companies’ operations , subsidiaries and value chains , third-country companies with significant operations in the eu should also be covered. more specifically , the directive should apply to third-country companies with significant operations in the union and with a global net turnover of at least eur 150 million in the financial year preceding the last financial year.


### (23) in order to achieve fully the objectives of this directive addressing human rights and adverse environmental impacts with respect to companies’ operations , subsidiaries and value chains , third-country companies with significant operations in the eu should also be covered. more specifically , the directive should apply to third-country companies which generated a net turnover of at least eur 150 million in the union in the financial year preceding the last financial year or a net turnover of more than eur 40 million but less than eur 150 million in the financial year preceding the last financial year in one or more of the high-impact sectors , as of 2 years after the end of the transposition period of this directive. ### (23) in order to achieve fully the objectives of this directive addressing human rights and adverse environmental impacts with respect to companies’ operations , subsidiaries and supply chains , third-country companies with significant operations in the eu should also be covered. more specifically , the directive should apply to third-country companies which generated a net turnover of at least eur 150 million in the union in the financial year preceding the last financial year or a net turnover of more than eur 50 million but less than eur 150 million in the financial year preceding the last financial year in one or more of the high-impact sectors , as of 4 years after the end of the transposition period of this directive.


### (23) in order to achieve fully the objectives of this directive addressing human rights and adverse environmental impacts with respect to companies’ operations , subsidiaries and value chains , third-country companies with significant operations in the eu should also be covered. more specifically , the directive should apply to third-country companies which generated a net turnover of at least eur 150 million in the union in the financial year preceding the last financial year or a net turnover of more than eur 40 million but less than eur 150 million in the financial year preceding the last financial year in one or more of the high-impact sectors , as of 2 years after the end of the transposition period of this directive. ### (23) in order to achieve fully the objectives of this directive addressing human rights and adverse environmental impacts with respect to companies’ operations , subsidiaries and supply chains , third-country companies with significant operations in the eu should also be covered. more specifically , the directive should apply to third-country companies which generated a net turnover of at least eur 150 million in the union in the financial year preceding the last financial year or a net turnover of more than eur 40 million but less than eur 150 million in the financial year preceding the last financial year in one or more of the high-impact sectors , as of 2 years after the end of the transposition period of this directive.


### (24) for defining the scope of application in relation to non-eu companies the described turnover criterion should be chosen as it creates a territorial connection between the third-country companies and the union territory. turnover is a proxy for the effects that the activities of those companies could have on the internal market. in accordance with international law , such effects justify the application of union law to third-country companies. to ensure identification of the relevant turnover of companies concerned , the methods for calculating net turnover for non-eu companies as laid down in directive (eu) 2013/34 as amended by directive (eu) 2021/2101 should be used. to ensure effective enforcement of this directive , an employee threshold should , in turn , not be applied to determine which third-country companies fall under this directive , as the notion of “employees” retained for the purposes of this directive is based on union law and could not be easily transposed outside of the union. in the absence of a clear and consistent methodology , including in accounting frameworks , to determine the employees of third-country companies , such employee threshold would therefore create legal uncertainty and would be difficult to apply for supervisory authorities. the definition of turnover should be based on directive 2013/34/eu which has already established the methods for calculating net turnover for non-union companies , as turnover and revenue definitions are similar in international accounting frameworks too. with a view to ensuring that the supervisory authority knows which third country companies generate the required turnover in the union to fall under the scope of this directive , this directive should require that a supervisory authority in the member state where the third country company’s authorised representative is domiciled or established and , where it is different , a supervisory authority in the member state in which the company generated most of its net turnover in the union in the financial year preceding the last financial year are informed that the company is a company falling under the scope of this directive. ### (24) for defining the scope of application in relation to non-eu companies the described turnover criterion should be chosen as it ensures alignment between third-country companies and those in the union , and ensures that the latter are not subject to more stringent conditions. turnover is a proxy for the effects that the activities of those companies could have on the internal market. in accordance with international law , such effects justify the application of union law to third-country companies. to ensure identification of the relevant turnover of companies concerned , the methods for calculating net turnover for non-eu companies as laid down in directive (eu) 2013/34 as amended by directive (eu) 2021/2101 should be used. to ensure effective enforcement of this directive , an employee threshold should , in turn , not be applied to determine which third-country companies fall under this directive , as the notion of “employees” retained for the purposes of this directive is based on union law and could not be easily transposed outside of the union. in the absence of a clear and consistent methodology , including in accounting frameworks , to determine the employees of third-country companies , such employee threshold would therefore create legal uncertainty and would be difficult to apply for supervisory authorities. the definition of turnover should be based on directive 2013/34/eu which has already established the methods for calculating net turnover for non-union companies , as turnover and revenue definitions are similar in international accounting frameworks too. with a view to ensuring that the supervisory authority knows which third country companies generate the required turnover to fall under the scope of this directive , this directive should require that a supervisory authority in the member state where the third country company’s authorised representative is domiciled or established and , where it is different , a supervisory authority in the member state in which the company generated most of its net turnover in the union in the financial year preceding the last financial year are informed that the company is a company falling under the scope of this directive.


### (25) in order to achieve a meaningful contribution to the sustainability transition , due diligence under this directive should be carried out with respect to adverse human rights impact on protected persons resulting from the violation of one of the rights and prohibitions as enshrined in the international conventions as listed in the annex to this directive. in order to ensure a comprehensive coverage of human rights , a violation of a prohibition or right not specifically listed in that annex which directly impairs a legal interest protected in those conventions should also form part of the adverse human rights impact covered by this directive , provided that the company concerned could have reasonably established the risk of such impairment and any appropriate measures to be taken in order to comply with the due diligence obligations under this directive , taking into account all relevant circumstances of their operations , such as the sector and operational context. due diligence should further encompass adverse environmental impacts resulting from the violation of one of the prohibitions and obligations pursuant to the international environmental conventions listed in the annex to this directive. ### (25) in order to achieve a meaningful contribution to the sustainability transition , due diligence under this directive should be carried out with respect to adverse human rights impact on protected persons resulting from the violation of one of the rights and prohibitions as enshrined in the international conventions as listed in the annex to this directive. due diligence should further encompass adverse environmental impacts resulting from the violation of one of the prohibitions and obligations pursuant to the international environmental conventions listed in the annex to this directive. there is a need for standards to be clear and applicable so that companies have sufficient legal certainty. particular account should be taken here of the fact that most international conventions listed in the annex are addressed to governments.


### (25) in order to achieve a meaningful contribution to the sustainability transition , due diligence under this directive should be carried out with respect to adverse human rights impact on protected persons resulting from the violation of one of the rights and prohibitions as enshrined in the international conventions as listed in the annex to this directive. in order to ensure a comprehensive coverage of human rights , a violation of a prohibition or right not specifically listed in that annex which directly impairs a legal interest protected in those conventions should also form part of the adverse human rights impact covered by this directive , provided that the company concerned could have reasonably established the risk of such impairment and any appropriate measures to be taken in order to comply with the due diligence obligations under this directive , taking into account all relevant circumstances of their operations , such as the sector and operational context. due diligence should further encompass adverse environmental impacts resulting from the violation of one of the prohibitions and obligations pursuant to the international environmental conventions listed in the annex to this directive. ### (25) in order to achieve a meaningful contribution to the sustainability transition , due diligence under this directive should be carried out with respect to adverse human rights impact on protected persons resulting from the violation of one of the rights and prohibitions as enshrined in the international conventions as listed in the annex to this directive. due diligence should further encompass adverse environmental impacts resulting from the violation of one of the prohibitions and obligations pursuant to the international environmental conventions listed in the annex to this directive.


### (27) in order to conduct appropriate human rights , and environmental due diligence with respect to their operations , their subsidiaries , and their value chains , companies covered by this directive should integrate due diligence into corporate policies , identify , prevent and mitigate as well as bring to an end and minimise the extent of potential and actual adverse human rights and environmental impacts , establish and maintain a complaints procedure , monitor the effectiveness of the taken measures in accordance with the requirements that are set up in this directive and communicate publicly on their due diligence. in order to ensure clarity for companies , in particular the steps of preventing and mitigating potential adverse impacts and of bringing to an end , or when this is not possible , minimising actual adverse impacts should be clearly distinguished in this directive. ### (27) in order to conduct appropriate human rights , and environmental due diligence , companies covered by this directive should integrate due diligence into corporate policies , identify , prevent and mitigate as well as bring to an end and minimise the extent of potential and actual adverse human rights and environmental impacts , establish and maintain a complaints procedure , monitor the effectiveness of the taken measures in accordance with the requirements that are set up in this directive and communicate publicly on their due diligence. in order to ensure clarity for companies , in particular the steps of preventing and mitigating potential adverse impacts and of bringing to an end , or when this is not possible , minimising actual adverse impacts should be clearly distinguished in this directive.


### (27) in order to conduct appropriate human rights , and environmental due diligence with respect to their operations , their subsidiaries , and their value chains , companies covered by this directive should integrate due diligence into corporate policies , identify , prevent and mitigate as well as bring to an end and minimise the extent of potential and actual adverse human rights and environmental impacts , establish and maintain a complaints procedure , monitor the effectiveness of the taken measures in accordance with the requirements that are set up in this directive and communicate publicly on their due diligence. in order to ensure clarity for companies , in particular the steps of preventing and mitigating potential adverse impacts and of bringing to an end , or when this is not possible , minimising actual adverse impacts should be clearly distinguished in this directive. ### (27) in order to conduct appropriate human rights and environmental due diligence with respect to their operations , companies covered by this directive should integrate due diligence into corporate policies , identify , prevent and mitigate as well as bring to an end and minimise the extent of potential and actual adverse human rights and environmental impacts , establish and maintain a screening procedure , monitor the effectiveness of the taken measures in accordance with the requirements that are set up in this directive and communicate publicly on their due diligence. in order to ensure clarity for companies , in particular the steps of preventing and mitigating potential adverse impacts and of bringing to an end , or when this is not possible , minimising actual adverse impacts should be clearly distinguished in this directive.


### (27) in order to conduct appropriate human rights , and environmental due diligence with respect to their operations , their subsidiaries , and their value chains , companies covered by this directive should integrate due diligence into corporate policies , identify , prevent and mitigate as well as bring to an end and minimise the extent of potential and actual adverse human rights and environmental impacts , establish and maintain a complaints procedure , monitor the effectiveness of the taken measures in accordance with the requirements that are set up in this directive and communicate publicly on their due diligence. in order to ensure clarity for companies , in particular the steps of preventing and mitigating potential adverse impacts and of bringing to an end , or when this is not possible , minimising real adverse impacts should be clearly distinguished in this directive. ### (27) in order to conduct appropriate human rights , and environmental due diligence with respect to their operations , their subsidiaries , and their value chains , companies covered by this directive should integrate due diligence into corporate policies , identify , prevent and mitigate as well as bring to an end and minimise the extent of foreseeable , based on the state of knowledge , and actual adverse human rights and environmental impacts , establish and maintain a complaints procedure , monitor the effectiveness of the taken measures in accordance with the requirements that are set up in this directive and communicate publicly on their due diligence. in order to ensure clarity for companies , in particular the steps of preventing and mitigating adverse impacts that are foreseeable , based on the state of knowledge , and of bringing to an end , or when this is not possible , minimising real adverse impacts should be clearly distinguished in this directive.


### (27) in order to conduct appropriate human rights , and environmental due diligence with respect to their operations , their subsidiaries , and their value chains , companies covered by this directive should integrate due diligence into corporate policies , identify , prevent and mitigate as well as bring to an end and minimise the extent of potential and actual adverse human rights and environmental impacts , establish and maintain a complaints procedure , monitor the effectiveness of the taken measures in accordance with the requirements that are set up in this directive and communicate publicly on their due diligence. in order to ensure clarity for companies , in particular the steps of preventing and mitigating potential adverse impacts and of bringing to an end , or when this is not possible , minimising actual adverse impacts should be clearly distinguished in this directive. ### (27) in order to conduct appropriate human rights , and environmental due diligence with respect to their operations , their subsidiaries , and their supply chains , companies covered by this directive should integrate due diligence into corporate policies , identify , prevent and mitigate as well as bring to an end and minimise the extent of potential and actual adverse human rights and environmental impacts , establish and maintain a complaints procedure , monitor the effectiveness of the taken measures in accordance with the requirements that are set up in this directive and communicate publicly on their due diligence. in order to ensure clarity for companies , in particular the steps of preventing and mitigating potential adverse impacts and of bringing to an end , or when this is not possible , minimising actual adverse impacts should be clearly distinguished in this directive.


### (29) to comply with due diligence obligations , companies need to take appropriate measures with respect to identification , prevention and bringing to an end adverse impacts. an ‘appropriate measure’ should mean a measure that is capable of achieving the objectives of due diligence , commensurate with the degree of severity and the likelihood of the adverse impact , and reasonably available to the company , taking into account the circumstances of the specific case , including characteristics of the economic sector and of the specific business relationship and the company’s influence thereof , and the need to ensure prioritisation of action. in this context , in line with international frameworks , the company’s influence over a business relationship should include , on the one hand its ability to persuade the business relationship to take action to bring to an end or prevent adverse impacts (for example through ownership or factual control , market power , pre-qualification requirements , linking business incentives to human rights and environmental performance , etc.) and , on the other hand , the degree of influence or leverage that the company could reasonably exercise , for example through cooperation with the business partner in question or engagement with another company which is the direct business partner of the business relationship associated with adverse impact. ### (29) to comply with due diligence obligations , companies need to take appropriate measures with respect to identification , prevention and bringing to an end adverse impacts. an ‘appropriate measure’ should mean a proportionate measure that is capable of achieving the objectives of risk-based due diligence , commensurate inter alia with the degree of severity , the extent and the likelihood of the adverse impact , the degree to which the company has contributed with its own operations , and reasonably available to the company , taking into account the circumstances of the specific case , including characteristics of the economic sector and of the specific business relationship and the company’s influence thereof , and the need to ensure prioritisation of action. in this context , in line with international frameworks , the company’s influence over a business relationship should include , on the one hand its ability to persuade the business relationship to take action to bring to an end or prevent adverse impacts (for example through ownership or factual control , market power , pre-qualification requirements , linking business incentives to human rights and environmental performance , etc.) and , on the other hand , the degree of influence or leverage that the company could reasonably exercise , for example through cooperation with the business partner in question or engagement with another company which is the direct business partner of the business relationship associated with adverse impact.


### (29) to comply with due diligence obligations , companies need to take appropriate measures with respect to identification , prevention and bringing to an end adverse impacts. an ‘appropriate measure’ should mean a measure that is capable of achieving the objectives of due diligence , commensurate with the degree of severity and the likelihood of the adverse impact , and reasonably available to the company , taking into account the circumstances of the specific case , including characteristics of the economic sector and of the specific business relationship and the company’s influence thereof , and the need to ensure prioritisation of action. in this context , in line with international frameworks , the company’s influence over a business relationship should include , on the one hand its ability to persuade the business relationship to take action to bring to an end or prevent adverse impacts (for example through ownership or factual control , market power , pre-qualification requirements , linking business incentives to human rights and environmental performance , etc.) and , on the other hand , the degree of influence or leverage that the company could reasonably exercise , for example through cooperation with the business partner in question or engagement with another company which is the direct business partner of the business relationship associated with adverse impact. ### (29) to comply with due diligence obligations , companies need to take appropriate measures with respect to identification , prevention and bringing to an end adverse impacts. an ‘appropriate measure’ should mean a measure that is capable of achieving the objectives of due diligence , commensurate with the degree of severity and the likelihood of the adverse impact , and reasonably available to the company , taking into account the circumstances of the specific case , including characteristics of the economic sector and of the specific business relationship and the company’s influence thereof , and the need to ensure prioritisation of action.


### (30) under the due diligence obligations set out by this directive , a company should identify actual or potential adverse human rights and environmental impacts. in order to allow for a comprehensive identification of adverse impacts , such identification should be based on quantitative and qualitative information. for instance , as regards adverse environmental impacts , the company should obtain information about baseline conditions at higher risk sites or facilities in value chains. identification of adverse impacts should include assessing the human rights , and environmental context in a dynamic way and in regular intervals: prior to a new activity or relationship , prior to major decisions or changes in the operation; in response to or anticipation of changes in the operating environment; and periodically , at least every 12 months , throughout the life of an activity or relationship. regulated financial undertakings providing loan , credit , or other financial services should identify the adverse impacts only at the inception of the contract. when identifying adverse impacts , companies should also identify and assess the impact of a business relationship’s business model and strategies , including trading , procurement and pricing practices. where the company cannot prevent , bring to an end or minimize all its adverse impacts at the same time , it should be able to prioritize its action , provided it takes the measures reasonably available to the company , taking into account the specific circumstances. ### (30) under the due diligence obligations set out by this directive , a company should identify actual or potential adverse human rights and environmental impacts. in order to allow for a comprehensive identification of adverse impacts , such identification should be based on quantitative and qualitative information. for instance , as regards adverse environmental impacts , the company should obtain information about baseline conditions at higher risk sites or facilities in their operations. identification of adverse impacts should include assessing the human rights , and environmental context in a dynamic way and in regular intervals: prior to a new activity or relationship , prior to major decisions or changes in the operation; and periodically , at least every 12 months , throughout the life of an activity or relationship. regulated financial undertakings providing loan , credit , or other financial services should identify the adverse impacts only at the inception of the contract. when identifying adverse impacts , companies should also identify and assess the impact of a business relationship’s business model and strategies , including trading , procurement and pricing practices. where the company cannot prevent , bring to an end or minimize all its adverse impacts at the same time , it should be able to prioritize its action , provided it takes the measures reasonably available to the company , taking into account the specific circumstances.


### (30) under the due diligence obligations set out by this directive , a company should identify actual or potential adverse human rights and environmental impacts. in order to allow for a comprehensive identification of adverse impacts , such identification should be based on quantitative and qualitative information. for instance , as regards adverse environmental impacts , the company should obtain information about baseline conditions at higher risk sites or facilities in value chains. identification of adverse impacts should include assessing the human rights , and environmental context in a dynamic way and in regular intervals: prior to a new activity or relationship , prior to major decisions or changes in the operation; in response to or anticipation of changes in the operating environment; and periodically , at least every 12 months , throughout the life of an activity or relationship. regulated financial undertakings providing loan , credit , or other financial services should identify the adverse impacts only at the inception of the contract. when identifying adverse impacts , companies should also identify and assess the impact of a business relationship’s business model and strategies , including trading , procurement and pricing practices. where the company cannot prevent , bring to an end or minimize all its adverse impacts at the same time , it should be able to prioritize its action , provided it takes the measures reasonably available to the company , taking into account the specific circumstances. ### (30) under the due diligence obligations set out by this directive , a company should identify actual or , based on the state of knowledge , foreseeable adverse human rights and environmental impacts. in order to allow for a comprehensive identification of adverse impacts , such identification should be based on quantitative and qualitative information. for instance , as regards adverse environmental impacts , the company should obtain information about baseline conditions at higher risk sites or facilities in value chains. identification of adverse impacts should include assessing the human rights , and environmental context in a dynamic way and in regular intervals: prior to a new activity or relationship , prior to major decisions or changes in the operation; in response to or anticipation of changes in the operating environment; and periodically , at least every 12 months , throughout the life of an activity or relationship. regulated financial undertakings providing loan , credit , or other financial services should identify the adverse impacts only at the inception of the contract. when identifying adverse impacts , companies should also identify and assess the impact of a business relationship’s business model and strategies , including trading , procurement and pricing practices. where the company cannot prevent , bring to an end or minimize all its adverse impacts at the same time , it should be able to prioritize its action , provided it takes the measures reasonably available to the company , taking into account the specific circumstances.


### (30) under the due diligence obligations set out by this directive , a company should identify actual or potential adverse human rights and environmental impacts. in order to allow for a comprehensive identification of adverse impacts , such identification should be based on quantitative and qualitative information. for instance , as regards adverse environmental impacts , the company should obtain information about baseline conditions at higher risk sites or facilities in value chains. identification of adverse impacts should include assessing the human rights , and environmental context in a dynamic way and in regular intervals: prior to a new activity or relationship , prior to major decisions or changes in the operation; in response to or anticipation of changes in the operating environment; and periodically , at least every 12 months , throughout the life of an activity or relationship. regulated financial undertakings providing loan , credit , or other financial services should identify the adverse impacts only at the inception of the contract. when identifying adverse impacts , companies should also identify and assess the impact of a business relationship’s business model and strategies , including trading , procurement and pricing practices. where the company cannot prevent , bring to an end or minimize all its adverse impacts at the same time , it should be able to prioritize its action , provided it takes the measures reasonably available to the company , taking into account the specific circumstances. ### (30) under the due diligence obligations set out by this directive , a company should identify actual or potential adverse human rights and environmental impacts. in order to allow for a comprehensive identification of adverse impacts , such identification should be based on quantitative and qualitative information. for instance , as regards adverse environmental impacts , the company should obtain information about baseline conditions at higher risk sites or facilities in supply chains. identification of adverse impacts should include assessing the human rights , and environmental context in a dynamic way and in regular intervals: prior to a new activity or relationship , prior to major decisions or changes in the operation; in response to or anticipation of changes in the operating environment; and periodically , at least every 12 months , throughout the life of an activity or relationship. regulated financial undertakings providing loan , credit , or other financial services should identify the adverse impacts only at the inception of the contract. when identifying adverse impacts , companies should also identify and assess the impact of a business relationship’s business model and strategies , including trading , procurement and pricing practices. where the company cannot prevent , bring to an end or minimize all its adverse impacts at the same time , it should be able to prioritize its action , provided it takes the measures reasonably available to the company , taking into account the specific circumstances.


### (31) in order to avoid undue burden on the smaller companies operating in high-impact sectors which are covered by this directive , those companies should only be obliged to identify those actual or potential severe adverse impacts that are relevant to the respective sector. ### (31) in order to avoid undue burden on the medium-sized companies operating in high-impact sectors which are covered by this directive , those companies should only be obliged to identify those actual or potential severe adverse impacts that are relevant to the respective sector.


### (31) in order to avoid undue burden on the smaller companies operating in high-impact sectors which are covered by this directive , those companies should only be obliged to identify those actual or potential severe adverse impacts that are relevant to the respective sector. ### deleted


### (31) in order to avoid undue burden on the smaller companies operating in high-impact sectors which are covered by this directive , those companies should only be obliged to identify those actual or potential severe adverse impacts that are relevant to the respective sector. ### (31) in order to avoid undue burden on the smaller companies operating in high-impact sectors which are covered by this directive , those companies should only be obliged to identify those actual or , based on the state of knowledge , foreseeable severe adverse impacts that are relevant to the respective sector.


### (32) in line with international standards , prevention and mitigation as well as bringing to an end and minimisation of adverse impacts should take into account the interests of those adversely impacted. in order to enable continuous engagement with the value chain business partner instead of termination of business relations (disengagement) and possibly exacerbating adverse impacts , this directive should ensure that disengagement is a last-resort action , in line with the union`s policy of zero-tolerance on child labour. terminating a business relationship in which child labour was found could expose the child to even more severe adverse human rights impacts. this should therefore be taken into account when deciding on the appropriate action to take. ### (32) in line with international standards , prevention and mitigation as well as bringing to an end and minimisation of adverse impacts should take into account the interests of those adversely impacted. in order to enable continuous engagement with the value chain business partner instead of termination of business relations (disengagement) and possibly exacerbating adverse impacts , this directive should ensure that disengagement is a last-resort action , in line with the union`s policy of zero-tolerance on child labour. this should therefore be taken into account when deciding on the appropriate action to take.


### (34) so as to comply with the prevention and mitigation obligation under this directive , companies should be required to take the following actions , where relevant. where necessary due to the complexity of prevention measures , companies should develop and implement a prevention action plan. companies should seek to obtain contractual assurances from a direct partner with whom they have an established business relationship that it will ensure compliance with the code of conduct or the prevention action plan , including by seeking corresponding contractual assurances from its partners to the extent that their activities are part of the companies’ value chain. the contractual assurances should be accompanied by the appropriate measures to verify compliance. to ensure comprehensive prevention of actual and potential adverse impacts , companies should also make investments which aim to prevent adverse impacts , provide targeted and proportionate support for an sme with which they have an established business relationship such as financing , for example , through direct financing , low-interest loans , guarantees of continued sourcing , and assistance in securing financing , to help implement the code of conduct or prevention action plan , or technical guidance such as in the form of training , management systems upgrading , and collaborate with other companies. ### (34) so as to comply with the prevention and mitigation obligation under this directive , companies should be required to take the following actions , where relevant. where necessary due to the complexity of prevention measures , companies should develop and implement a prevention action plan. companies should seek to obtain contractual assurances from a direct partner with whom they have an established business relationship that it will ensure compliance with the code of conduct or the prevention action plan. the contractual assurances should be accompanied by the appropriate measures to verify compliance. to ensure comprehensive prevention of actual and potential adverse impacts , companies should also make investments which aim to prevent adverse impacts , provide targeted and proportionate support for an sme with which they have an established business relationship such as financing , for example , through direct financing , low-interest loans , guarantees of continued sourcing , and assistance in securing financing , to help implement the code of conduct or prevention action plan , or technical guidance such as in the form of training , management systems upgrading , and collaborate with other companies.


### (34) so as to comply with the prevention and mitigation obligation under this directive , companies should be required to take the following actions , where relevant. where necessary due to the complexity of prevention measures , companies should develop and implement a prevention action plan. companies should seek to obtain contractual assurances from a direct partner with whom they have an established business relationship that it will ensure compliance with the code of conduct or the prevention action plan , including by seeking corresponding contractual assurances from its partners to the extent that their activities are part of the companies’ value chain. the contractual assurances should be accompanied by appropriate measures to verify compliance. to ensure comprehensive prevention of actual and potential adverse impacts , companies should also make investments which aim to prevent adverse impacts , provide targeted and proportionate support for an sme with which they have an established business relationship such as financing , for example , through direct financing , low-interest loans , guarantees of continued sourcing , and assistance in securing financing , to help implement the code of conduct or prevention action plan , or technical guidance such as in the form of training , management systems upgrading , and collaborate with other companies. ### (34) so as to comply with the prevention and mitigation obligation under this directive , companies should be required to take the following actions , where relevant. where necessary due to the complexity of prevention measures , companies should develop and implement a prevention action plan. companies should seek to obtain contractual assurances from a direct partner with whom they have an established business relationship that it will ensure compliance with the code of conduct or the prevention action plan. the contractual assurances should be accompanied by appropriate measures to verify compliance. to ensure comprehensive prevention of actual and potential adverse impacts , companies should also make investments which aim to prevent adverse impacts.


### (34) so as to comply with the prevention and mitigation obligation under this directive , companies should be required to take the following actions , where relevant. where necessary due to the complexity of prevention measures , companies should develop and implement a prevention action plan. companies should seek to obtain contractual assurances from a direct partner with whom they have an established business relationship that it will ensure compliance with the code of conduct or the prevention action plan , including by seeking corresponding contractual assurances from its partners to the extent that their activities are part of the companies’ value chain. the contractual assurances should be accompanied by appropriate measures to verify compliance. to ensure comprehensive prevention of actual and potential adverse impacts , companies should also make investments which aim to prevent adverse impacts , provide targeted and proportionate support for an sme with which they have an established business relationship such as financing , for example , through direct financing , low-interest loans , guarantees of continued sourcing , and assistance in securing financing , to help implement the code of conduct or prevention action plan , or technical guidance such as in the form of training , management systems upgrading , and collaborate with other companies. ### (34) so as to comply with the prevention and mitigation obligation under this directive , companies should be required to take the following actions , where relevant. where necessary due to the complexity of prevention measures , companies should develop and implement a prevention action plan. companies should seek to obtain contractual assurances from a direct partner with whom they have an established business relationship that it will ensure compliance with the code of conduct or the prevention action plan , including by seeking corresponding contractual assurances from its partners to the extent that their activities are part of the companies’ value chain. the contractual assurances should be accompanied by appropriate measures to verify compliance. to ensure comprehensive prevention of actual and , based on the state of knowledge , foreseeable adverse impacts , companies should also make investments which aim to prevent adverse impacts , provide targeted and proportionate support for an sme with which they have an established business relationship such as financing , for example , through direct financing , low-interest loans , guarantees of continued sourcing , and assistance in securing financing , to help implement the code of conduct or prevention action plan , or technical guidance such as in the form of training , management systems upgrading , and collaborate with other companies.


### (34) so as to comply with the prevention and mitigation obligation under this directive , companies should be required to take the following actions , where relevant. where necessary due to the complexity of prevention measures , companies should develop and implement a prevention action plan. companies should seek to obtain contractual assurances from a direct partner with whom they have an established business relationship that it will ensure compliance with the code of conduct or the prevention action plan , including by seeking corresponding contractual assurances from its partners to the extent that their activities are part of the companies’ value chain. the contractual assurances should be accompanied by appropriate measures to verify compliance. to ensure comprehensive prevention of actual and potential adverse impacts , companies should also make investments which aim to prevent adverse impacts , provide targeted and proportionate support for an sme with which they have an established business relationship such as financing , for example , through direct financing , low-interest loans , guarantees of continued sourcing , and assistance in securing financing , to help implement the code of conduct or prevention action plan , or technical guidance such as in the form of training , management systems upgrading , and collaborate with other companies. ### (34) so as to comply with the prevention and mitigation obligation under this directive , companies should be required to take the following actions , where relevant. where necessary due to the complexity of prevention measures , companies should develop and implement a prevention action plan. companies should seek to obtain contractual assurances from a direct partner with whom they have an established business relationship that it will ensure compliance with the code of conduct or the prevention action plan , including by seeking corresponding contractual assurances from its partners to the extent that their activities are part of the companies’ supply chain. the contractual assurances should be accompanied by appropriate measures to verify compliance. to ensure comprehensive prevention of actual and potential adverse impacts , companies should also make investments which aim to prevent adverse impacts. companies may provide targeted and proportionate support for an sme with which they have an established business relationship such as financing , for example , through direct financing , low-interest loans , guarantees of continued sourcing , and assistance in securing financing , to help implement the code of conduct or prevention action plan , or technical guidance such as in the form of training , management systems upgrading , and collaborate with other companies.


### (34) so as to comply with the prevention and mitigation obligation under this directive , companies should be required to take the following actions , where relevant. where necessary due to the complexity of prevention measures , companies should develop and implement a prevention action plan. companies should seek to obtain contractual assurances from a direct partner with whom they have an established business relationship that it will ensure compliance with the code of conduct or the prevention action plan , including by seeking corresponding contractual assurances from its partners to the extent that their activities are part of the companies’ value chain. the contractual assurances should be accompanied by appropriate measures to verify compliance. to ensure comprehensive prevention of actual and potential adverse impacts , companies should also make investments which aim to prevent adverse impacts , provide targeted and proportionate support for an sme with which they have an established business relationship such as financing , for example , through direct financing , low-interest loans , guarantees of continued sourcing , and assistance in securing financing , to help implement the code of conduct or prevention action plan , or technical guidance such as in the form of training , management systems upgrading , and collaborate with other companies. ### (34) so as to comply with the prevention and mitigation obligation under this directive , companies should be required to take the following actions , where relevant. where necessary due to the complexity of prevention measures , companies should develop and implement a prevention action plan. companies should seek to obtain contractual assurances from a direct partner with whom they have an established business relationship that it will ensure compliance with the code of conduct or the prevention action plan , including by seeking corresponding contractual assurances from its partners to the extent that their activities are part of the companies’ supply chain. the contractual assurances should be accompanied by appropriate measures to verify compliance. to ensure comprehensive prevention of actual and potential adverse impacts , companies should also make investments which aim to prevent adverse impacts , provide targeted and proportionate support for an sme with which they have an established business relationship such as financing , for example , through direct financing , low-interest loans , guarantees of continued sourcing , and assistance in securing financing , to help implement the code of conduct or prevention action plan , or technical guidance such as in the form of training , management systems upgrading , and collaborate with other companies.


### (35) in order to reflect the full range of options for the company in cases where potential impacts could not be addressed by the described prevention or minimisation measures , this directive should also refer to the possibility for the company to seek to conclude a contract with the indirect business partner , with a view to achieving compliance with the company’s code of conduct or a prevention action plan , and conduct appropriate measures to verify compliance of the indirect business relationship with the contract. ### deleted


### (35) in order to reflect the full range of options for the company in cases where potential impacts could not be addressed by the described prevention or minimisation measures , this directive should also refer to the possibility for the company to seek to conclude a contract with the indirect business partner , with a view to achieving compliance with the company’s code of conduct or a prevention action plan , and conduct appropriate measures to verify compliance of the indirect business relationship with the contract. ### (35) in order to reflect the full range of options for the company in cases where foreseeable impacts , based on the state of knowledge , could not be addressed by the described prevention or minimisation measures , this directive should also refer to the possibility for the company to seek to conclude a contract with the indirect business partner , with a view to achieving compliance with the company’s code of conduct or a prevention action plan , and conduct appropriate measures to verify compliance of the indirect business relationship with the contract.


### (35) in order to reflect the full range of options for the company in cases where potential impacts could not be addressed by the described prevention or minimisation measures , this directive should also refer to the possibility for the company to seek to conclude a contract with the indirect business partner , with a view to achieving compliance with the company’s code of conduct or a prevention action plan , and conduct appropriate measures to verify compliance of the indirect business relationship with the contract. ### (35) in order to reflect the full range of options for the company in cases where potential impacts could not be addressed by the described prevention or minimisation measures , this directive should also refer to the possibility for the company to seek to conclude a contract with its direct business partner , with a view to achieving compliance with the company’s code of conduct or a prevention action plan , and conduct appropriate measures to verify compliance of the direct business relationship with the contract.


### (36) in order to ensure that prevention and mitigation of potential adverse impacts is effective , companies should prioritize engagement with business relationships in the value chain , instead of terminating the business relationship , as a last resort action after attempting at preventing and mitigating adverse potential impacts without success. however , the directive should also , for cases where potential adverse impacts could not be addressed by the described prevention or mitigation measures , refer to the obligation for companies to refrain from entering into new or extending existing relations with the partner in question and , where the law governing their relations so entitles them to , to either temporarily suspend commercial relationships with the partner in question , while pursuing prevention and minimisation efforts , if there is reasonable expectation that these efforts are to succeed in the short-term; or to terminate the business relationship with respect to the activities concerned if the potential adverse impact is severe. in order to allow companies to fulfil that obligation , member states should provide for the availability of an option to terminate the business relationship in contracts governed by their laws. it is possible that prevention of adverse impacts at the level of indirect business relationships requires collaboration with another company , for example a company which has a direct contractual relationship with the supplier. in some instances , such collaboration could be the only realistic way of preventing adverse impacts , in particular , where the indirect business relationship is not ready to enter into a contract with the company. in these instances , the company should collaborate with the entity which can most effectively prevent or mitigate adverse impacts at the level of the indirect business relationship while respecting competition law. ### (36) in order to ensure that prevention and mitigation of potential adverse impacts is effective , companies should prioritize engagement with business relationships , instead of terminating the business relationship , as a last resort action after attempting at preventing and mitigating adverse potential impacts without success. however , the directive should also , for cases where potential adverse impacts could not be addressed by the described prevention or mitigation measures , refer to the obligation for companies to refrain from entering into new or extending existing relations with the partner in question and , where the law governing their relations so entitles them to , to either temporarily suspend commercial relationships with the partner in question , while pursuing prevention and minimisation efforts , if there is reasonable expectation that these efforts are to succeed in the short-term; or to terminate the business relationship with respect to the activities concerned if the potential adverse impact is severe.


### (36) in order to ensure that prevention and mitigation of potential adverse impacts is effective , companies should prioritize engagement with business relationships in the value chain , instead of terminating the business relationship , as a last resort action after attempting at preventing and mitigating adverse potential impacts without success. however , the directive should also , for cases where potential adverse impacts could not be addressed by the described prevention or mitigation measures , refer to the obligation for companies to refrain from entering into new or extending existing relations with the partner in question and , where the law governing their relations so entitles them to , to either temporarily suspend commercial relationships with the partner in question , while pursuing prevention and minimisation efforts , if there is reasonable expectation that these efforts are to succeed in the short-term; or to terminate the business relationship with respect to the activities concerned if the potential adverse impact is severe. in order to allow companies to fulfil that obligation , member states should provide for the availability of an option to terminate the business relationship in contracts governed by their laws. it is possible that prevention of adverse impacts at the level of indirect business relationships requires collaboration with another company , for example a company which has a direct contractual relationship with the supplier. in some instances , such collaboration could be the only realistic way of preventing adverse impacts , in particular , where the indirect business relationship is not ready to enter into a contract with the company. in these instances , the company should collaborate with the entity which can most effectively prevent or mitigate adverse impacts at the level of the indirect business relationship while respecting competition law. ### (36) in order to ensure that prevention and mitigation of potential adverse impacts is effective , companies should prioritize engagement with business relationships in the value chain , instead of terminating the business relationship , as a last resort action after attempting at preventing and mitigating adverse potential impacts without success. however , the directive should also , for cases where potential adverse impacts could not be addressed by the described prevention or mitigation measures , refer to the obligation for companies to refrain from entering into new or extending existing relations with the partner in question and , where the law governing their relations so entitles them to , to either temporarily suspend commercial relationships with the partner in question , while pursuing prevention and minimisation efforts , if there is reasonable expectation that these efforts are to succeed in the short-term; or to terminate the business relationship with respect to the activities concerned if the potential adverse impact is severe. in order to allow companies to fulfil that obligation , member states should provide for the availability of an option to terminate the business relationship in contracts governed by their laws.


### (36) in order to ensure that prevention and mitigation of potential adverse impacts is effective , companies should prioritize engagement with business relationships in the value chain , instead of terminating the business relationship , as a last resort action after attempting at preventing and mitigating adverse potential impacts without success. however , the directive should also , for cases where potential adverse impacts could not be addressed by the described prevention or mitigation measures , refer to the obligation for companies to refrain from entering into new or extending existing relations with the partner in question and , where the law governing their relations so entitles them to , to either temporarily suspend commercial relationships with the partner in question , while pursuing prevention and minimisation efforts , if there is reasonable expectation that these efforts are to succeed in the short-term; or to terminate the business relationship with respect to the activities concerned if the potential adverse impact is severe. in order to allow companies to fulfil that obligation , member states should provide for the availability of an option to terminate the business relationship in contracts governed by their laws. it is possible that prevention of adverse impacts at the level of indirect business relationships requires collaboration with another company , for example a company which has a direct contractual relationship with the supplier. in some instances , such collaboration could be the only realistic way of preventing adverse impacts , in particular , where the indirect business relationship is not ready to enter into a contract with the company. in these instances , the company should collaborate with the entity which can most effectively prevent or mitigate adverse impacts at the level of the indirect business relationship while respecting competition law. ### (36) in order to ensure that prevention and mitigation of potential adverse impacts is effective , companies should prioritize engagement with business relationships , instead of terminating them , as a last resort action after attempting at preventing and mitigating adverse potential impacts without success. however , the directive should also , for cases where potential adverse impacts could not be addressed by the described prevention or mitigation measures , refer to the obligation for companies to refrain from entering into new or extending existing relations with the partner in question and , where the law governing their relations so entitles them to , to either temporarily suspend commercial relationships with the partner in question , while pursuing prevention and minimisation efforts , if there is reasonable expectation that these efforts are to succeed in the short-term; or to terminate the business relationship with respect to the activities concerned if the potential adverse impact is severe. in order to allow companies to fulfil that obligation , member states should provide for the availability of an option to terminate the business relationship in contracts governed by their laws.


### (36) in order to ensure that prevention and mitigation of potential adverse impacts is effective , companies should prioritize engagement with business relationships in the value chain , instead of terminating the business relationship , as a last resort action after attempting at preventing and mitigating adverse potential impacts without success. however , the directive should also , for cases where potential adverse impacts could not be addressed by the described prevention or mitigation measures , refer to the obligation for companies to refrain from entering into new or extending existing relations with the partner in question and , where the law governing their relations so entitles them to , to either temporarily suspend commercial relationships with the partner in question , while pursuing prevention and minimisation efforts , if there is reasonable expectation that these efforts are to succeed in the short-term; or to terminate the business relationship with respect to the activities concerned if the potential adverse impact is severe. in order to allow companies to fulfil that obligation , member states should provide for the availability of an option to terminate the business relationship in contracts governed by their laws. it is possible that prevention of adverse impacts at the level of indirect business relationships requires collaboration with another company , for example a company which has a direct contractual relationship with the supplier. in some instances , such collaboration could be the only realistic way of preventing adverse impacts , in particular , where the indirect business relationship is not ready to enter into a contract with the company. in these instances , the company should collaborate with the entity which can most effectively prevent or mitigate adverse impacts at the level of the indirect business relationship while respecting competition law. ### (36) in order to ensure that prevention and mitigation of adverse impacts that are foreseeable , based on the state of knowledge , is effective , companies should prioritize engagement with business relationships in the value chain , instead of terminating the business relationship , as a last resort action after attempting at preventing and mitigating adverse impacts that are foreseeable , based on the state of knowledge , without success. however , the directive should also , for cases where adverse impacts that are foreseeable , based on the state of knowledge , could not be addressed by the described prevention or mitigation measures , refer to the obligation for companies to refrain from entering into new or extending existing relations with the partner in question and , where the law governing their relations so entitles them to , to either temporarily suspend commercial relationships with the partner in question , while pursuing prevention and minimisation efforts , if there is reasonable expectation that these efforts are to succeed in the short-term; or to terminate the business relationship with respect to the activities concerned if the adverse impact that is foreseeable , based on the state of knowledge , is severe. in order to allow companies to fulfil that obligation , member states should provide for the availability of an option to terminate the business relationship in contracts governed by their laws. it is possible that prevention of adverse impacts at the level of indirect business relationships requires collaboration with another company , for example a company which has a direct contractual relationship with the supplier. in some instances , such collaboration could be the only realistic way of preventing adverse impacts , in particular , where the indirect business relationship is not ready to enter into a contract with the company. in these instances , the company should collaborate with the entity which can most effectively prevent or mitigate adverse impacts at the level of the indirect business relationship while respecting competition law.


### (36) in order to ensure that prevention and mitigation of potential adverse impacts is effective , companies should prioritize engagement with business relationships in the value chain , instead of terminating the business relationship , as a last resort action after attempting at preventing and mitigating adverse potential impacts without success. however , the directive should also , for cases where potential adverse impacts could not be addressed by the described prevention or mitigation measures , refer to the obligation for companies to refrain from entering into new or extending existing relations with the partner in question and , where the law governing their relations so entitles them to , to either temporarily suspend commercial relationships with the partner in question , while pursuing prevention and minimisation efforts , if there is reasonable expectation that these efforts are to succeed in the short-term; or to terminate the business relationship with respect to the activities concerned if the potential adverse impact is severe. in order to allow companies to fulfil that obligation , member states should provide for the availability of an option to terminate the business relationship in contracts governed by their laws. it is possible that prevention of adverse impacts at the level of indirect business relationships requires collaboration with another company , for example a company which has a direct contractual relationship with the supplier. in some instances , such collaboration could be the only realistic way of preventing adverse impacts , in particular , where the indirect business relationship is not ready to enter into a contract with the company. in these instances , the company should collaborate with the entity which can most effectively prevent or mitigate adverse impacts at the level of the indirect business relationship while respecting competition law. ### (36) in order to ensure that prevention and mitigation of potential adverse impacts is effective , companies should prioritize engagement with business relationships in the supply chain , instead of terminating the business relationship , as a last resort action after attempting at preventing and mitigating adverse potential impacts without success. however , the directive should also , for cases where potential adverse impacts could not be addressed by the described prevention or mitigation measures , refer to the obligation for companies to refrain from entering into new or extending existing relations with the partner in question and , where the law governing their relations so entitles them to , to either temporarily suspend commercial relationships with the partner in question , while pursuing prevention and minimisation efforts , if there is reasonable expectation that these efforts are to succeed in the short-term; or to terminate the business relationship with respect to the activities concerned if the potential adverse impact is severe. in order to allow companies to fulfil that obligation , member states should provide for the availability of an option to terminate the business relationship in contracts governed by their laws. it is possible that prevention of adverse impacts at the level of indirect business relationships requires collaboration with another company , for example a company which has a direct contractual relationship with the supplier. in some instances , such collaboration could be the only realistic way of preventing adverse impacts , in particular , where the indirect business relationship is not ready to enter into a contract with the company. in these instances , the company should collaborate with the entity which can most effectively prevent or mitigate adverse impacts at the level of the indirect business relationship while respecting competition law.


### (37) as regards direct and indirect business relationships , industry cooperation , industry schemes and multi-stakeholder initiatives can help create additional leverage to identify , mitigate , and prevent adverse impacts. therefore it should be possible for companies to rely on such initiatives to support the implementation of their due diligence obligations laid down in this directive to the extent that such schemes and initiatives are appropriate to support the fulfilment of those obligations. companies could assess , at their own initiative , the alignment of these schemes and initiatives with the obligations under this directive. in order to ensure full information on such initiatives , the directive should also refer to the possibility for the commission and the member states to facilitate the dissemination of information on such schemes or initiatives and their outcomes. the commission , in collaboration with member states , may issue guidance for assessing the fitness of industry schemes and multi-stakeholder initiatives. ### (37) as regards business relationships , industry cooperation , industry schemes and multi-stakeholder initiatives can help create additional leverage to identify , mitigate , and prevent adverse impacts. therefore it should be possible for companies to rely on such initiatives to support the implementation of their due diligence obligations laid down in this directive to the extent that such schemes and initiatives are appropriate to support the fulfilment of those obligations. companies could assess , at their own initiative , the alignment of these schemes and initiatives with the obligations under this directive. in order to ensure full information on such initiatives , the commission and the member states should facilitate the dissemination of information on such schemes or initiatives and their outcomes. the commission , in collaboration with member states , should issue guidance for assessing the fitness of industry schemes and multi-stakeholder initiatives. in addition , the commission should develop a system in which industry schemes and multi-stakeholder initiatives can be formally recognised. compliance with these recognised industry schemes and multi-stakeholder initiatives should lead to presumption of conformity with the diligence requirements imposed by this directive.


### (37) as regards direct and indirect business relationships , industry cooperation , industry schemes and multi-stakeholder initiatives can help create additional leverage to identify , mitigate , and prevent adverse impacts. therefore it should be possible for companies to rely on such initiatives to support the implementation of their due diligence obligations laid down in this directive to the extent that such schemes and initiatives are appropriate to support the fulfilment of those obligations. companies could assess , at their own initiative , the alignment of these schemes and initiatives with the obligations under this directive. in order to ensure full information on such initiatives , the directive should also refer to the possibility for the commission and the member states to facilitate the dissemination of information on such schemes or initiatives and their outcomes. the commission , in collaboration with member states , may issue guidance for assessing the fitness of industry schemes and multi-stakeholder initiatives. ### (37) as regards direct business relationships , industry cooperation , industry schemes and multi-stakeholder initiatives can help create additional leverage to identify , mitigate , and prevent adverse impacts. therefore it should be possible for companies to rely on such initiatives to support the implementation of their due diligence obligations laid down in this directive to the extent that such schemes and initiatives are appropriate to support the fulfilment of those obligations. companies could assess , at their own initiative , the alignment of these schemes and initiatives with the obligations under this directive. in order to ensure full information on such initiatives , the directive should also refer to the possibility for the commission and the member states to facilitate the dissemination of information on such schemes or initiatives and their outcomes. the commission , in collaboration with member states , may issue guidance for assessing the fitness of industry schemes and multi-stakeholder initiatives.


### (38) under the due diligence obligations set out by this directive , if a company identifies actual human rights or environmental adverse impacts , it should take appropriate measures to bring those to an end. it can be expected that a company is able to bring to an end actual adverse impacts in their own operations and in subsidiaries. however , it should be clarified that , as regards established business relationships , where adverse impacts cannot be brought to an end , companies should minimise the extent of such impacts. minimisation of the extent of adverse impacts should require an outcome that is the closest possible to bringing the adverse impact to an end. to provide companies with legal clarity and certainty , this directive should define which actions companies should be required to take for bringing actual human rights and environmental adverse impacts to an end and minimisation of their extent , where relevant depending on the circumstances. ### (38) under the due diligence obligations set out by this directive , if a company identifies actual human rights or environmental adverse impacts , it should take appropriate measures to bring those to an end. it can be expected that a company is able to bring to an end actual adverse impacts in their own operations and in subsidiaries. however , it should be clarified that , as regards business relationships , where adverse impacts cannot be brought to an end , companies should minimise the extent of such impacts. minimisation of the extent of adverse impacts should require an outcome that is the closest possible to bringing the adverse impact to an end. to provide companies with legal clarity and certainty , this directive should define which actions companies should be required to take for bringing actual human rights and environmental adverse impacts to an end and minimisation of their extent , where relevant depending on the circumstances.