The EU Corporate Sustainability Due Diligence Directive (CSDDD) marks a significant step in the evolution of transnational corporate governance, moving away from the predominantly voluntary nature of corporate social responsibility toward a more binding regulatory framework. A key feature of this shift is the introduction of mandatory requirements for companies to adopt codes of conduct—private policies that set out standards, such as labor rights, which must be enforced across global supply chains. As expectations grew for businesses to integrate human rights and environmental risk assessments into their due diligence processes,1 codes of conduct became an increasingly common way for companies to demonstrate their commitment to social and environmental concerns. Today, nearly 80 percent of European multinationals have adopted such codes.2
