### (14) this directive aims to ensure that companies active in the internal market contribute to sustainable development and the sustainability transition of economies and societies through the identification , prevention and mitigation , bringing to an end and minimisation of potential or actual adverse human rights and environmental impacts connected with companies’ own operations , subsidiaries and value chains. ### (14) this directive aims to ensure that companies active in the internal market contribute to sustainable development and the sustainability transition of economies and societies through the identification , prevention and mitigation , bringing to an end and minimisation of potential or actual adverse human rights , environmental , and climate impacts connected with companies’ own operations , products throughout their life cycle and services , subsidiaries and value chains.


### (15) companies should take appropriate steps to set up and carry out due diligence measures , with respect to their own operations , their subsidiaries , as well as their established direct and indirect business relationships throughout their value chains in accordance with the provisions of this directive. this directive should not require companies to guarantee , in all circumstances , that adverse impacts will never occur or that they will be stopped. for example with respect to business relationships where the adverse impact results from state intervention , the company might not be in a position to arrive at such results. therefore , the main obligations in this directive should be ‘obligations of means’. the company should take the appropriate measures which can reasonably be expected to result in prevention or minimisation of the adverse impact under the circumstances of the specific case. account should be taken of the specificities of the company’s value chain , sector or geographical area in which its value chain partners operate , the company’s power to influence its direct and indirect business relationships , and whether the company could increase its power of influence. ### (15) companies should take appropriate steps to set up and carry out due diligence measures , with respect to their own operations , their subsidiaries , as well as their direct and indirect business relationships throughout their value chains in accordance with the provisions of this directive. when companies are not in a position to avoid adverse impacts from the value chains , they should be required to terminate the harmful business relationships and to modify the structure of their value chains in order to ensure that that no longer contributes to or can be a cause of the adverse impact. the company should take the appropriate measures which can reasonably be expected to result in prevention or minimisation of the adverse impact under the circumstances of the specific case. account should be taken of the specificities of the company’s value chain , sector or geographical area in which its value chain partners operate , the company’s power to influence its direct and indirect business relationships , and whether the company could increase its power of influence.


### (15) companies should take appropriate steps to set up and carry out due diligence measures , with respect to their own operations , their subsidiaries , as well as their established direct and indirect business relationships throughout their value chains in accordance with the provisions of this directive. this directive should not require companies to guarantee , in all circumstances , that adverse impacts will never occur or that they will be stopped. for example with respect to business relationships where the adverse impact results from state intervention , the company might not be in a position to arrive at such results. therefore , the main obligations in this directive should be ‘obligations of means’. the company should take the appropriate measures which can reasonably be expected to result in prevention or minimisation of the adverse impact under the circumstances of the specific case. account should be taken of the specificities of the company’s value chain , sector or geographical area in which its value chain partners operate , the company’s power to influence its direct and indirect business relationships , and whether the company could increase its power of influence. ### (15) companies should take appropriate steps to set up and carry out due diligence measures , with respect to their own operations , products throughout their life cycle and services , their subsidiaries , as well as their direct and indirect business relationships throughout their value chains in accordance with the provisions of this directive. this directive should not require companies to guarantee , in all circumstances , that adverse impacts will never occur or that they will be stopped. for example with respect to business relationships where the adverse impact results from state intervention , the company might not be in a position to arrive at such results. therefore , the main obligations in this directive should be ‘obligations of means’. the company should take the appropriate measures which can reasonably be expected to result in prevention or minimisation of the adverse impact under the circumstances of the specific case. account should be taken of the specificities of the company’s value chain , sector or geographical area in which its value chain partners operate , the company’s power to influence its direct and indirect business relationships , and whether the company could increase its power of influence.


### (15) companies should take appropriate steps to set up and carry out due diligence measures , with respect to their own operations , their subsidiaries , as well as their established direct and indirect business relationships throughout their value chains in accordance with the provisions of this directive. this directive should not require companies to guarantee , in all circumstances , that adverse impacts will never occur or that they will be stopped. for example with respect to business relationships where the adverse impact results from state intervention , the company might not be in a position to arrive at such results. therefore , the main obligations in this directive should be ‘obligations of means’. the company should take the appropriate measures which can reasonably be expected to result in prevention or minimisation of the adverse impact under the circumstances of the specific case. account should be taken of the specificities of the company’s value chain , sector or geographical area in which its value chain partners operate , the company’s power to influence its direct and indirect business relationships , and whether the company could increase its power of influence. ### (15) companies should take appropriate steps to set up and carry out due diligence measures , with respect to their own operations , products and services , those of their subsidiaries , as well as their direct and indirect business relationships throughout their value chains in accordance with the provisions of this directive. this directive should not require companies to guarantee , in all circumstances , that adverse impacts will never occur or that they will be stopped. for example with respect to business relationships where the adverse impact results from state intervention , the company might not be in a position to arrive at such results. as a result , in this situation there is no reasonable prospect of change , and therefore the company should be required to terminate the business relationship with respect to the activities concerned. therefore , the main obligations in this directive should be ‘obligations of means’. the company should take the appropriate measures which can reasonably be expected to result in prevention or minimisation of the adverse impact under the circumstances of the specific case. account should be taken of the specificities of the company’s value chain , sector or geographical area in which its value chain partners operate , the company’s power to influence its direct and indirect business relationships , and whether the company could increase its power of influence.


### (17) adverse human rights and environmental impact occur in companies’ own operations , subsidiaries , products , and in their value chains , in particular at the level of raw material sourcing , manufacturing , or at the level of product or waste disposal. in order for the due diligence to have a meaningful impact , it should cover human rights and environmental adverse impacts generated throughout the life-cycle of production and use and disposal of product or provision of services , at the level of own operations , subsidiaries and in value chains. ### (17) adverse human rights , environmental , and climate impact occur in companies’ own operations , subsidiaries , products , and in their value chains , in particular at the level of raw material sourcing , manufacturing , or at the level of product or waste management and disposal. in order for the due diligence to have a meaningful impact , it should cover human rights , environmental , and climate adverse impacts generated throughout the life-cycle of production , use , waste management , and disposal of product or provision of services , at the level of own operations , subsidiaries and in value chains.


### (18) the value chain should cover activities related to the production of a good or provision of services by a company , including the development of the product or the service and the use and disposal of the product as well as the related activities of established business relationships of the company. it should encompass upstream established direct and indirect business relationships that design , extract , manufacture , transport , store and supply raw material , products , parts of products , or provide services to the company that are necessary to carry out the company’s activities , and also downstream relationships , including established direct and indirect business relationships , that use or receive products , parts of products or services from the company up to the end of life of the product , including inter alia the distribution of the product to retailers , the transport and storage of the product , dismantling of the product , its recycling , composting or landfilling. ### (18) the value chain should cover activities related to the production , distribution and sale of a good or provision of services by a company , and any of its directly and indirectly-owned subsidiaries and branches including inter alia the development of the product or the service and the use and disposal of the product as well as the related activities of business relationships of the company. it should encompass upstream direct and indirect business relationships that design , extract , manufacture , transport , store and supply raw material , products , parts of products , or provide services to the company and any of its directly and indirectly-owned subsidiaries and branches that are necessary to carry out the company’s activities , and also downstream relationships , including direct and indirect business relationships , that use or receive products , parts of products or services from the company and any of its directly- and indirectly-owned subsidiaries and branches up to the end of life of the product , including inter alia the distribution of the product to retailers , the sale of products or provisions of services to consumers whatever the means (e.g. franchising , licensing) , the transport and storage of the product , dismantling of the product , its recycling , composting or landfilling. as pointed out in the oecd guidelines for multinational enterprises , the value chain should cover the various structures that the company and any of its directly and indirectly-owned subsidiaries and branches use to operate including inter alia franchising , licensing and subcontracting.


### (18) the value chain should cover activities related to the production of a good or provision of services by a company , including the development of the product or the service and the use and disposal of the product as well as the related activities of established business relationships of the company. it should encompass upstream established direct and indirect business relationships that design , extract , manufacture , transport , store and supply raw material , products , parts of products , or provide services to the company that are necessary to carry out the company’s activities , and also downstream relationships , including established direct and indirect business relationships , that use or receive products , parts of products or services from the company up to the end of life of the product , including inter alia the distribution of the product to retailers , the transport and storage of the product , dismantling of the product , its recycling , composting or landfilling. ### (18) the value chain should cover all activities related to the production and use of a good or provision of services by a company , including the development of the product or the service and the use , waste management , and disposal of the product as well as the related activities of business relationships of the company. it should encompass upstream direct and indirect business relationships that design , extract , manufacture , transport , store and supply primary and secondary raw material , products , parts of products , or provide services to the company that are necessary to carry out the company’s activities , and also downstream relationships , including established direct and indirect business relationships , that use or receive products , parts of products or services from the company up to the end of life of the product , including inter alia the distribution of the product to retailers , the transport and storage of the product , dismantling of the product , its recycling , composting or landfilling.


### (18) the value chain should cover activities related to the production of a good or provision of services by a company , including the development of the product or the service and the use and disposal of the product as well as the related activities of established business relationships of the company. it should encompass upstream established direct and indirect business relationships that design , extract , manufacture , transport , store and supply raw material , products , parts of products , or provide services to the company that are necessary to carry out the company’s activities , and also downstream relationships , including established direct and indirect business relationships , that use or receive products , parts of products or services from the company up to the end of life of the product , including inter alia the distribution of the product to retailers , the transport and storage of the product , dismantling of the product , its recycling , composting or landfilling. ### (18) the value chain should cover activities related to the production of a good or provision of services by a company , including the development of the product or the service and the use and disposal of the product as well as the related activities of the business relationships of the company. it should encompass upstream established direct and indirect business relationships that design , extract , manufacture , transport , store and supply raw material , products , parts of products , or provide services to the company that are necessary to carry out the company’s activities , and also downstream relationships , including direct and indirect business relationships , that use or receive products , parts of products or services from the company up to the end of life of the product , including inter alia the distribution of the product to retailers , the transport and storage of the product , dismantling of the product , its recycling , composting or landfilling.


### (20) in order to allow companies to properly identify the adverse impacts in their value chain and to make it possible for them to exercise appropriate leverage , the due diligence obligations should be limited in this directive to established business relationships. for the purpose of this directive , established business relationships should mean such direct and indirect business relationships which are , or which are expected to be lasting , in view of their intensity and duration and which do not represent a negligible or ancillary part of the value chain. the nature of business relationships as “established” should be reassessed periodically , and at least every 12 months. if the direct business relationship of a company is established , then all linked indirect business relationships should also be considered as established regarding that company. ### (20) in order to allow companies to properly identify the adverse impacts in their value chain and to make it possible for them to exercise appropriate leverage , the due diligence obligations should cover all business relationships. for the purpose of this directive , business relationships should mean direct and indirect business relationships.


### (20) in order to allow companies to properly identify the adverse impacts in their value chain and to make it possible for them to exercise appropriate leverage , the due diligence obligations should be limited in this directive to established business relationships. for the purpose of this directive , established business relationships should mean such direct and indirect business relationships which are , or which are expected to be lasting , in view of their intensity and duration and which do not represent a negligible or ancillary part of the value chain. the nature of business relationships as “established” should be reassessed periodically , and at least every 12 months. if the direct business relationship of a company is established , then all linked indirect business relationships should also be considered as established regarding that company. ### (20) in order to allow companies to properly identify the adverse impacts in their value chain and to make it possible for them to exercise appropriate leverage , the due diligence obligations should be limited in this directive to business relationships. for the purpose of this directive , business relationships should mean such direct and indirect business relationships which are , or which are expected to be lasting , in view of their intensity and duration and which do not represent a negligible or ancillary part of the value chain. the nature of business relationships as “established” should be reassessed periodically , and at least every 12 months. if the direct business relationship of a company is established , then all linked indirect business relationships should also be considered as established regarding that 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 50 employees on average and a worldwide net turnover exceeding eur 8 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 the employee criterion , but which had more than 8 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 , 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 250 employees on average or a worldwide net turnover exceeding eur 40 million and/ or a balance sheet of more than eur 20 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 had more than 10 employees on average or and had a net worldwide turnover of more than eur 700 000 and/ or a balance sheet of more than eur 350 000 in the last financial year , are publicly listed on the stock exchange or 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. 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) , 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 energy; extraction , transport and handling 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); construction , logistics and infrastructures; oil and gas production and oil refining sector; financial services; auditing and certification.


### (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 , environmental , and climate issues , the selection of high-impact sectors for the purposes of this directive should , not exclusively , be based on existing sectoral oecd due diligence guidance. the following sectors should , not exclusively , be regarded as high-impact for the purposes of this directive: the energy sector including gas , nuclear , steam , electricity and other sources throughout their life cycle; the chemical sector; the manufacture of textiles , leather and related products (including footwear) , and the wholesale trade of textiles , clothing and footwear; plastic production; waste shipment and management; agriculture , forestry , fisheries (including aquaculture) , the management of land and resources , the manufacture of food products , and the wholesale trade of agricultural raw materials , live animals , wood , food , and beverages; the extraction and refining 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); financial and insurance activities.


### (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 , wearing apparel , leather and related products (including footwear) , and the wholesale trade and retail of textiles , clothing and footwear; agriculture , forestry , fisheries (including aquaculture) , the manufacture of food products , marketing and advertising of food and beverages , and the wholesale trade of agricultural raw materials , live animals , animal products , wood , food , and beverages; energy , the extraction , transport and handling 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) , the wholesale trade of mineral resources , basic and intermediate mineral products (including metals and metal ores , construction materials , fuels , chemicals and other intermediate products) , construction and related activities , the provision of financial services , such as loans , credits , financing , pensions , market funding , risk management , payment services , securitisation , insurance or reinsurance , investment services and activities and other financial services; and the production , provision and distribution of information and communication technologies or related services , including hardware , device or component manufacturers , software solutions , including artificial intelligence , surveillance , facial recognition , data storage or processing , telecommunication services , including internet service providers or exchange points , web-based and cloud-based services , including social media and networking , messaging , e-commerce , delivery , mobility , and other platform services , and tourism and hospitality.


### (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) and the provision of financial services , such as loans , credits , financing , pensions , market funding , risk management , payment services , securitisation , insurance or reinsurance services , investment services and activities and other financial services.


### (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 , environmental , rule of law and good governance 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) , 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 and sale to consumers; the energy; extraction , transport , processing , refining and handling 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); construction , logistics and infrastructures; oil and gas production and oil refining sector. 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.


### (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 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 8 million in the union in the financial year preceding the last financial year. business enterprises may have various structures resulting in a single company having a net turnover below the threshold. as mentioned in the interpretative guide to the united nations guiding principles on business and human rights , companies may operate inter alia through various subsidiaries or follow a franchise model. companies may also outsource or subcontract significant activities. therefore , net turnover generated by the company in the union should include net turnover generated directly in the union by the company and the net turnover generated in the union by its directly and indirectly-owned subsidiaries and branches , as well as the net turnover generated in the union through third party undertakings with whom the company or its directly and indirectly-owned subsidiaries and branches have entered into a vertical agreement in return for payment of royalties or an outsourcing agreement.


### (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 , environmental , and climate impacts with respect to companies’ operations , products and services throughout their life cycle , 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 8 million in the union in the financial year.


### (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. 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 and climate impacts meaning impacts contributing to the exceeding of planetary boundaries or an adverse impact on the following elements: climate , air and the atmosphere , water and access to water , soil , biodiversity , the transition to a circular economy , light , noise and vibration or human health including occupational health and safety.


### (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 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 grievance mechanism , 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 and related information in order to support companies , their subsidiaries and business partners operating in developing countries to identify , prevent and effectively address actual or potential adverse impacts on human rights and environment. 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 and providing for remediation of 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 , environmental and climate due diligence with respect to their operations , products and services throughout their life-cycle , their subsidiaries , and their value chains , companies covered by this directive should integrate due diligence into corporate policies with short- , medium-and long-term measures and targets , identify , prevent and mitigate as well as bring to an end and minimise the extent of potential and actual adverse human rights , environmental , and climate impacts , meaningfully engage with stakeholders whose rights or interests are or could be affected by actual or potential adverse impacts along its value chain , establish and maintain a complaints procedure , monitor and assess 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 , children's 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.


### (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.


### (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 meaningful stakeholder engagement and 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 , environmental , and climate 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 and climate 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 and climate 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. where the company cannot prevent , bring to an end or minimize all its adverse impacts at the same time , it should develop and implement a prioritisation strategy in consultation with stakeholders , which shall take into account the level of severity , likelihood and reversibility of the different potential adverse impacts on human rights , the environment and climate.


### (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 potential 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 , mitigation and remediation as well as bringing to an end and minimisation of adverse impacts should fully take into account the interests of those adversely impacted and should be designed and determined on the basis of meaningful engagement with them. companies should engage in a timely manner , efficiently and meaningfully with stakeholders impacted by the decision to suspend or terminate the adverse impacts before reaching that decision , and shall address the adverse impacts derived from those actions.


### (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 , tracking , mitigation , remediation as well as bringing to an end and minimisation of actual and potential adverse impacts should focus on the interests of all persons , groups of persons and entities adversely impacted. in line with the union’s policy of zero-tolerance on child labour , union’s strategy on the rights of the child1a and the target date of 2025 proclaimed by the united nations for the full elimination of child labour worldwide , when ending business relationships , the company should act in the best interest of the child.


### (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. 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 , and disengagement should be avoided where the impact of disengagement would be greater than the adverse impact the company is seeking to prevent or mitigate. in situations of state-imposed forced labour , where the adverse impact is systemic and organized by political authorities , unhindered engagement with those adversely impacted and mitigation are not possible. this directive should ensure that companies terminate a business relationship where state-imposed forced labour is systemic.


### (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 , mitigation and remediation as well as bringing to an end and minimisation of adverse impacts should fully take into account the interests of those adversely impacted and should be designed and determined on the basis of meaningful engagement with them. companies should engage in a timely manner , efficiently and meaningfully with stakeholders impacted by the decision to suspend or terminate the adverse impacts before reaching that decision , and shall address the adverse impacts derived from those actions. in line with the union’s policy of zero-tolerance on child labour , the companies should disengage from business relations that exploits in any form child labour as defined in the ilo convention no. 182.


### (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. companies should develop and implement a prevention action plan. companies should obtain contractual assurances from a direct partner with whom they have a 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 adapt their business models and strategies , including trading , procurement , purchasing and pricing practices , and make investments which aim to prevent adverse impacts , provide targeted and proportionate support for an sme with which they have a 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 a 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 a 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.


### (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 mitigation 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.


### (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 , environmental , and climate 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. mitigation 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 , environmental , and climate adverse impacts to an end and minimisation of their extent.


### (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.


### (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 adverse human rights , environmental , rule of law and good governance 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 and to require partners to do so. however , it should be clarified that , as regards business relationships , where adverse impacts cannot be brought to an end , companies should minimise such impacts , to the greatest extent possible. 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 adverse human rights , environmental , rule of law and good governance impacts to an end and minimisation of their extent , where relevant depending on the circumstances.


### (39) so as to comply with the obligation of bringing to an end and minimising the extent of actual adverse impacts under this directive , companies should be required to take the following actions , where relevant. they should neutralise the adverse impact or minimise its extent , with an action proportionate to the significance and scale of the adverse impact and to the contribution of the company’s conduct to the adverse impact. where necessary due to the fact that the adverse impact cannot be immediately brought to an end , companies should develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. companies should also seek to obtain contractual assurances from a direct business partner with whom they have an established business relationship that they will ensure compliance with the company’s code of conduct and , as necessary , a prevention action plan , including by seeking corresponding contractual assurances from its partners , to the extent that their activities are part of the company’s value chain. the contractual assurances should be accompanied by the appropriate measures to verify compliance. finally , companies should also make investments aiming at ceasing or minimising the extent of adverse impact , provide targeted and proportionate support for an smes with which they have an established business relationship and collaborate with other entities , including , where relevant , to increase the company’s ability to bring the adverse impact to an end. ### (39) so as to comply with the obligation of bringing to an end and minimising the extent of actual adverse impacts under this directive , companies should be required to take the following actions , where relevant. they should neutralise the adverse impact or minimise it to the greatest extent possible , with an action proportionate to the significance and scale of the adverse impact. where necessary due to the fact that the adverse impact cannot be immediately brought to an end , companies should develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. companies should also obtain contractual assurances from a direct business partner with whom they have an established business relationship that they will ensure compliance with the company’s code of conduct and , as necessary , a prevention action plan , including by seeking corresponding contractual assurances from its partners , to the extent that their activities are part of the company’s value chain. the contractual assurances should be accompanied by the appropriate measures to verify compliance. finally , companies should also make investments aiming at ceasing or minimising the adverse impact to the greatest extent possible , provide targeted and proportionate support for an smes with which they have an established business relationship and collaborate with other entities , including to increase the company’s ability to bring the adverse impact to an end.


### (39) so as to comply with the obligation of bringing to an end and minimising the extent of actual adverse impacts under this directive , companies should be required to take the following actions , where relevant. they should neutralise the adverse impact or minimise its extent , with an action proportionate to the significance and scale of the adverse impact and to the contribution of the company’s conduct to the adverse impact. where necessary due to the fact that the adverse impact cannot be immediately brought to an end , companies should develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. companies should also seek to obtain contractual assurances from a direct business partner with whom they have an established business relationship that they will ensure compliance with the company’s code of conduct and , as necessary , a prevention action plan , including by seeking corresponding contractual assurances from its partners , to the extent that their activities are part of the company’s value chain. the contractual assurances should be accompanied by the appropriate measures to verify compliance. finally , companies should also make investments aiming at ceasing or minimising the extent of adverse impact , provide targeted and proportionate support for an smes with which they have an established business relationship and collaborate with other entities , including , where relevant , to increase the company’s ability to bring the adverse impact to an end. ### (39) so as to comply with the obligation of bringing to an end and minimising the extent of actual adverse impacts under this directive , companies should be required to take the following actions , where relevant. they should neutralise the adverse impact or minimise its extent , with an action proportionate to the significance and scale of the adverse impact and to the contribution of the company’s conduct to the adverse impact. where necessary due to the fact that the adverse impact cannot be immediately brought to an end , companies should develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. companies should also seek to obtain contractual assurances from a direct business partner with whom they have a business relationship that they will ensure compliance with the company’s code of conduct and , as necessary , a prevention action plan , including by seeking corresponding contractual assurances from its partners , to the extent that their activities are part of the company’s value chain. the contractual assurances should be accompanied by the appropriate measures to verify compliance. finally , companies should also make investments aiming at ceasing or minimising the extent of adverse impact , provide targeted and proportionate support for an smes with which they have a business relationship and collaborate with other entities , including , where relevant , to increase the company’s ability to bring the adverse impact to an end.


### (39) so as to comply with the obligation of bringing to an end and minimising the extent of actual adverse impacts under this directive , companies should be required to take the following actions , where relevant. they should neutralise the adverse impact or minimise its extent , with an action proportionate to the significance and scale of the adverse impact and to the contribution of the company’s conduct to the adverse impact. where necessary due to the fact that the adverse impact cannot be immediately brought to an end , companies should develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. companies should also seek to obtain contractual assurances from a direct business partner with whom they have an established business relationship that they will ensure compliance with the company’s code of conduct and , as necessary , a prevention action plan , including by seeking corresponding contractual assurances from its partners , to the extent that their activities are part of the company’s value chain. the contractual assurances should be accompanied by the appropriate measures to verify compliance. finally , companies should also make investments aiming at ceasing or minimising the extent of adverse impact , provide targeted and proportionate support for an smes with which they have an established business relationship and collaborate with other entities , including , where relevant , to increase the company’s ability to bring the adverse impact to an end. ### (39) so as to comply with the obligation of bringing to an end and minimising the extent of actual adverse impacts under this directive , companies should be required to take the following actions , where relevant. they should neutralise the adverse impact or minimise it to the greatest extent possible , with an action proportionate to the significance and scale of the adverse impact. where necessary due to the fact that the adverse impact cannot be immediately brought to an end , companies should develop and implement a corrective action plan with reasonable and clearly defined timelines for action and qualitative and quantitative indicators for measuring improvement. companies should also obtain contractual assurances from a direct business partner with whom they have a business relationship that they will ensure compliance with the company’s code of conduct and , as necessary , a prevention action plan , including by obtaining corresponding contractual assurances from its partners , to the extent that their activities are part of the company’s value chain. the contractual assurances should be accompanied by the appropriate measures to verify compliance. finally , companies should also make investments aiming at ceasing or minimising the adverse impact to the greatest extent possible , provide targeted and proportionate support for an smes with which they have an established business relationship and collaborate with other entities , including to increase the company’s ability to bring the adverse impact to an end.


### (42) companies should provide the possibility for persons and organisations to submit complaints directly to them in case of legitimate concerns regarding actual or potential human rights and environmental adverse impacts. organisations who could submit such complaints should include trade unions and other workers’ representatives representing individuals working in the value chain concerned and civil society organisations active in the areas related to the value chain concerned where they have knowledge about a potential or actual adverse impact. companies should establish a procedure for dealing with those complaints and inform workers , trade unions and other workers’ representatives , where relevant , about such processes. recourse to the complaints and remediation mechanism should not prevent the complainant from having recourse to judicial remedies. in accordance with international standards , complaints should be entitled to request from the company appropriate follow-up on the complaint and to meet with the company’s representatives at an appropriate level to discuss potential or actual severe adverse impacts that are the subject matter of the complaint. this access should not lead to unreasonable solicitations of companies. ### (42) companies should provide the possibility for persons and organisations to submit grievances directly to them in case of legitimate concerns regarding actual or potential human rights and environmental adverse impacts. organisations who could submit such grievances should include trade unions and other workers’ representatives representing individuals working in the value chain concerned , civil society organisations and human rights and environmental defenders. companies should establish a procedure for dealing with those grievances and inform all relevant stakeholders , including workers , trade unions and other workers’ representatives about such processes. recourse to the grievances and remediation mechanism should not prevent the complainant from having recourse to judicial remedies. in accordance with international standards , grievances should be entitled to request from the company appropriate follow-up on the grievance and to meet with the company’s representatives at an appropriate level to discuss potential or actual severe adverse impacts that are the subject matter of the grievance.


### (42) companies should provide the possibility for persons and organisations to submit complaints directly to them in case of legitimate concerns regarding actual or potential human rights and environmental adverse impacts. organisations who could submit such complaints should include trade unions and other workers’ representatives representing individuals working in the value chain concerned and civil society organisations active in the areas related to the value chain concerned where they have knowledge about a potential or actual adverse impact. companies should establish a procedure for dealing with those complaints and inform workers , trade unions and other workers’ representatives , where relevant , about such processes. recourse to the complaints and remediation mechanism should not prevent the complainant from having recourse to judicial remedies. in accordance with international standards , complaints should be entitled to request from the company appropriate follow-up on the complaint and to meet with the company’s representatives at an appropriate level to discuss potential or actual severe adverse impacts that are the subject matter of the complaint. this access should not lead to unreasonable solicitations of companies. ### (42) companies should provide the possibility for persons and organisations to submit complaints directly to them in case of legitimate concerns regarding actual or potential human rights and environmental adverse impacts. organisations who could submit such complaints include trade unions and workers’ representatives representing individuals working in the value chain concerned and civil society organisations active in the areas related to the value chain concerned where they have knowledge about a potential or actual adverse impact. companies should ensure that the rights of involvement , information , consultation and participation of trade unions and workers' representatives , as provided by union law and national law and practices , are fully respected and implemented. companies should , in cooperation with the social partners , establish a procedure for dealing with complaints and inform workers , trade unions and workers’ representatives , where relevant , about such processes. recourse to the complaints and remediation mechanism should not prevent the complainant from having recourse to judicial remedies. in accordance with international standards , complaints and/or their representatives should be entitled to request from the company appropriate follow-up on the complaint and to meet with the company’s representatives at an appropriate level to discuss potential or actual severe adverse impacts that are the subject matter of the complaint. while exercising this right , workers and their representatives should be properly protected and this access should not lead to unreasonable solicitations of companies