The potential of contractual assurances to advance supply chain due diligence

The European Directive on corporate sustainability due diligence requires companies to make their supply chains sustainable by obtaining contractual assurances from their suppliers. Noncompliance is met with administrative sanctions and civil liability. In this contribution, we question the capability of contractual assurances to sufficiently influence business conduct in the supply chain. Imposing sanctions and civil liability do not resolve the difficulties that may, in practice, impede the control of supply chains through contracts. Therefore, based on recent empirical research and existing general conditions used by twelve multinational companies, we offer recommendations that can help companies manage their supply chains contractually and thus contribute to the effectiveness of the Directive.