In the consultation, they gave digital tools a section of their own. It asked which tools help companies identify, monitor, and assess adverse impacts, what difficulties and unnecessary burdens they cause, and whether more tools are needed at all.
Let's break down:
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- Why digital tools earned their own section in the consultation
- What the criticism of current tools gets right
- What good implementation actually looks like in practice
What is the CSDDD open public consultation?
The open public consultation was the European Commission’s opportunity for companies, civil society organisations, experts, and other stakeholders to provide input on the upcoming CSDDD implementation guidelines. The consultation focused on how due diligence works in practice, including where companies need more guidance and how tools and other resources can support implementation. The responses will inform the Commission as it develops the guidelines.
Why do digital tools get their own section in the consultation?
The CSDDD requires companies to take a risk-based approach to identifying risks by first identifying where the most severe and likely impacts may occur across the chain of activities, meaning the supply chain, and then taking a closer look at those areas. For a large company, that can mean assessing risk across thousands of suppliers, many of them being suppliers your team has never spoken to.
Traditional methods weren’t designed for that scale. Desk research can be thorough, but a sustainability team can only assess a limited number of suppliers in a year. Self-assessment questionnaires depend on suppliers responding, and each additional request adds to their reporting burden.
This is where digital tools come in. Using external data, such as adverse media, information publicly available on suppliers’ own websites, and country and industry risk indices, companies can screen a large supplier base without asking suppliers to provide anything. And unlike an annual questionnaire, that screening can run continuously.
That’s where digital tools fit into the CSDDD’s two-step approach: screen broadly, then dig deeper where risks are most severe and likely to occur.
What does the criticism of digital tools get right?
Much of the criticism is that tools can flag risk signals across thousands of suppliers, but they can’t verify what’s happening on the ground. They can process public data, but they can’t replace a conversation with a workers’ representative or a visit to a factory.
We agree. A platform should help companies structure and operationalize due diligence, not do the due diligence for them. Digital tools should support human judgment and stakeholder engagement, not replace them.
Beyond that, there are legitimate concerns about how many tools are built:
- Black-box scoring: A risk score is only useful if you can understand what’s behind it. Suppliers need to know what is driving their score and what they can improve, while buyers need to understand and explain how the assessment was made.
- Supplier burden: Suppliers already receive similar questionnaires from multiple buyers, often in different formats and on different platforms. Digital tools should reduce this duplication by making it easier to reuse information, not create yet another request for suppliers to respond to.
- Cost barriers: If suppliers have to pay to participate, smaller suppliers may be less able or willing to engage. Digital tools should make engagement easier, not create another barrier to participation.
For us at Worldfavor, these concerns are important. That’s why we’re transparent about the methodologies behind our assessments, build functionality that makes it easier for suppliers to respond to and reuse information, and keep participation free for suppliers. Digital tools should make supply chain due diligence easier for everyone involved, not create new barriers.
What does good implementation look like in practice?
After years of working with companies on supply chain due diligence, here’s what we’ve seen work.
Start broad, then focus where it matters
Not every supplier needs the same level of scrutiny. Where risks are higher, deeper assessments, supplier engagement, on-site visits, and regular follow-up may be needed. For lower-risk suppliers, a proportionate approach helps companies focus their resources where they matter most.
For the long tail, that can mean starting with external data rather than requesting information from every supplier. At Worldfavor, we combine country-level risk indices with industry-level risk indices based. When that screening identifies a risk signal, companies can follow up with targeted assessments and engagement.
The important part is that the initial screening determines what comes next. Instead of putting every supplier through the same process, companies can tailor their assessments and engagement to the risks identified.
Give suppliers a reason to engage
Due diligence shouldn't feel like a one-way request for data. In our experience, suppliers are more likely to engage and to provide better information when they get something back, such as feedback on their results, a clear view of where gaps exist, and guidance on how to improve. That principle is central to how we approach supplier engagement.
Make the methodology visible
A good digital tool shows how it reaches its conclusions. If a supplier's risk profile changes, companies should be able to understand what triggered the change, which sources were used, and how the information was assessed.
We make our methodologies visible so that companies can understand, explain, and defend the basis for their assessments, and suppliers can see what's driving their results and where they can improve.
Reduce supplier burden, don't add to it
One of the biggest challenges in supply chain due diligence is that suppliers are often asked for the same or similar information by multiple customers, in different formats and on different platforms. For SMEs in particular, that can add up quickly.
Digital tools should reduce that burden, not add another layer to it. For us at Worldfavor, the principle is simple: make better use of information that already exists before asking suppliers to provide it again.
How should companies prepare now?
The implementation guidelines won’t be final until 2027, but the regulatory expectations are already taking shape. Companies can start setting up their due diligence processes now rather than waiting for the final guidance and risk falling behind.
Want to discuss what that could look like for your supply chain? Get in touch and let’s talk through your due diligence setup.
→ Talk to a Worldfavor expert today
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