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What is supply chain due diligence?
With a growing demand for the verification of ESG (Environmental, Social, Governance) performance and compliance, companies must ensure supply chain transparency and accountability.
Supply chain due diligence is the process of evaluating the current state of a target company's supply chain. It is the standard and precautionary care that should be taken to make informed decisions.
Companies must manage their supply chain risks effectively as the number of global due diligence supply chain regulations increases. Examples include the EU Corporate Sustainability Due Diligence Directive (CSDDD / CS3D), the German Supply Chain Due Diligence Act (LkSG), EUDR Deforestation Regulation, and EUBR Battery Regulation. These legislative frameworks promote responsible business practices across supply chains and require companies to identify, prevent, mitigate, and account for negative human rights and environmental impacts within their own operations and throughout their supply chains.
The CSDD Directive applies to large EU and non-EU companies operating within the Union and mandates clear responsibilities for corporate boards to ensure compliance. Its goal is to foster ethical supply chains, ensuring businesses respect human rights, minimise environmental harm, and implement transparent reporting mechanisms.
Companies need to integrate due diligence considerations into their policies and risk management systems. They must also employ a robust risk and impact assessment process, followed by appropriate prevention, mitigation and remediation measures. This all needs to be communicated to authorities and stakeholders.
TÜV SÜD offers range of services from trainings, auditing programs across the value chain, and verification of the implemented due diligence systems by the organisations. We are an approved provider of the main industry programmes, third-party audits, and collaborative initiatives globally.
Why supply chain due diligence is important
Supply chain due diligence is becoming a critical success factor and one of the highest business priorities in the current global landscape. The complexity of global supply chains requires businesses to have greater visibility and control over their operations. Laws such as the EU CSDDD are imposing mandatory due diligence on large corporations, increasing the need for robust supply chain management that has a cascading effect on the bottom tier of suppliers.
Companies need to prevent, mitigate, and remedy environmental and human rights violations. Without effective due diligence, non-compliance could lead to financial penalties and reputational damage.
The market is pushing companies to be more transparent and responsible and prove their credentials using due diligence methods. Investors and consumers are placing increasing importance on ESG performance, while global sustainability goals and climate commitments mean businesses must ensure their supply chains align with ethical and sustainable practices.
Engage with TÜV SÜD to implement internationally recognized due diligence standards, control supplier information reliability through on-site auditing, validate your due diligence management system, and communicate third-party verified supply chain claims for informed risk decisions.
The challenges of supply chain due diligence
Visibility and control
Many businesses struggle with visibility over their entire supply chain, making it difficult to identify and mitigate risks.
Compliance with diverse supply chain regulations
Different countries and regions have varying laws, making it challenging to adhere to all due diligence requirements.
High costs of data collection
Gathering accurate data for risk assessments can be time-consuming and expensive.
Supplier accountability
Ensuring that suppliers adhere to sustainability and human rights standards can be difficult, especially without proper auditing mechanisms.
Resource constraints
Many organisations lack the expertise or resources to implement comprehensive due diligence practices.
Assessment and reporting
Due diligence systems and their results must be periodically evaluated and disclosed to external parties
How TÜV SÜD’s supply chain due diligence solutions can help you
TÜV SÜD has decades of third-party business conformity and assurance services experience. Our solutions help you increase the reliability of your operations by proactively identifying, assessing, and mitigating supply chain risks.
Our professional and unbiased experts use proven, robust methodologies aligned with global standards so that your organisation receives valuable insights. We offer a complete service package that includes risk assessment, gap analysis, validation, verification, and reporting that ensures localised compliance with global standards.
Our comprehensive evaluation and reporting ensure the transparent disclosure of the status quo of your supply chain due diligence amongst suppliers, local communities, consumers and NGOs. Our supply chain due diligence solutions help you to manage financial, environmental, reputational risks whilst optimising supply chain security and business continuity.
What our supply chain due diligence services include
Governance & risk assessment
EU Deforestation Regulation (EUDR) Services
The EU Deforestation Regulation (EUDR) requires companies to prove that their products, like soy, cattle, rubber, palm oil, timber, cocoa and coffee, are not linked to deforestation. Coming into effect from 30 December 2025, it impacts producers, importers, and traders, and their suppliers. TÜV SÜD supports businesses with training, audits, and verification services to ensure EUDR compliance. We help identify risks, review supplier documentation, and assess due diligence systems. Our experts provide practical insights to build trust, meet EU market requirements, and promote sustainable sourcing.
Supply chain due diligence system verification
Due diligence systems verification provides third-party evaluation of an organisation's responsible management of risks and impacts across the value chain, specific to the company's contextual factors such as geography and industry. The service results in a comprehensive report outlining strengths and areas for improvement, addressing the need for integration of due diligence best practices and sustainable procurement considerations.
ISO 20400 sustainable procurement
Sustainable procurement demonstrates advanced integration of sustainability considerations into purchasing strategies and practices. This helps to reduce environmental impacts across the product life cycle, improve social conditions of workers and smallholders, mitigate risks, enhance reputation, and create economic benefits throughout the entire value chain.
Sustainability disclosures verification
TÜV SÜD offers expert support for sustainability reporting, helping companies meet increasing stakeholder expectations and legal requirements. Our services cover all stages of reporting, from preparation to verification, using established frameworks like GRI and CSRD. We provide training, assessments, and verification services to enhance supply chain transparency, boost credibility, and drive sustainable business practices across environmental, social, and governance areas.
ISO 31000 risk management
ISO 31000 is an international standard for enterprise risk management, providing principles, guidelines, and a framework for organisations to effectively manage risks across their operations. It offers a structured approach to risk assessment and treatment, while TÜV SÜD provides the integration into existing management systems.
Risk prevention and mitigation measures
TÜV SÜD ESG supplier audits
TÜV SÜD's ESG supplier audits address the pressing need for robust risk management in supply chains amidst growing ESG concerns. By evaluating supplier alignment, resilience, and adherence to ESG principles, you can build resilient supply chains that meet ethical standards and due diligence regulatory requirements.
Code of Conduct audits
Codes of Conduct govern corporate practices according to ethical and legal norms. Brands and importers either develop their own standards or adopt internationally recognised methods, often customised to meet specific requirements. TÜV SÜD offers global auditing to evaluate the implementation of Codes of Conduct that demonstrate commitment to high ethical standards and exceed legal minimums.
Specialty supplier audits – Social compliance, environmental, health & safety
In today's regulatory landscape, businesses face increasing pressure to uphold human rights and social compliance standards throughout their value chains to mitigate legal risks and safeguard their reputations. Businesses can build trust with our social compliance audits.
Management system certifications
Third-party management system certification services help the companies to meet the contractual assurance obligations with enhanced risk management, and efficient operations across the value chain covering quality, security and sustainability.
Other TÜV SÜD due diligence services
Technical due diligence
Our experts analyse building structures, materials and technical systems to identify structural, technical, environmental and financial risks and opportunities for real estate investments. In addition, we determine the value and future viability of technical installations and equipment, and review the efficiency and competitiveness of plant technology and production processes. We use a holistic approach to check the plausibility of capital expenditure and operational expenditure assumptions, and identify possible needs for future investments and the development of operational costs. This provides a technical perspective for evaluating whether the business and financial targets of a transaction are realistic.
Environmental due diligence
With our expertise in local and international environmental legislation, we perform integrated analysis of existing contaminations in soil or building materials, indoor pollutants, waste management and other environmental factors. We narrow down environmentally sensitive areas and estimate the potential financial risk.
Sustainability due diligence
TÜV SÜD's experts look at the current state and potential risks of your assets to evaluate long-term sustainability value. SDD serves as an initial assessment in line with the guidelines in common sustainability rating systems (BREEAM, LEED). We investigate a building's potential sustainability score, advise on the most suitable system and recommend ways to improve its rating.
Commercial due diligence
We cover commercial analyses and the assessment of location and market factors, taking into account legal requirements, and general and special lease agreements. CDD determines the competitive landscape, right valuation, growth opportunities, potential risks and investments.
