VIKAND, in collaboration with key maritime stakeholders, has published an analysis to guide the maritime industry on compliance with two new EU sustainability supply chain laws.
The report explores EU’s Corporate Sustainability Due Diligence Directive (CSDDD), also known as the EU Supply Chain Act. The aim of this Directive is to foster sustainable and responsible corporate behaviour in companies’ operations and across their global value chains. The new rules will ensure that companies in scope identify and address adverse human rights and environmental impacts of their actions inside and outside Europe.
The other directive is the EU Corporate Sustainability Reporting Directive (CSRD). EU law requires all large companies and all listed companies (except listed micro-enterprises) to disclose information on what they see as the risks and opportunities arising from social and environmental issues, and on the impact of their activities on people and the environment.
The CSDDD, adopted on May 24, 2024, takes effect in 2025, while the CSRD is already in place. These new laws require companies to manage the social and environmental impacts of their entire value chain, including both direct and indirect suppliers.
Key compliance requirements
VIKAND’s analysis outlines the essential steps for maritime companies to meet their corporate due diligence obligations concerning human rights and environmental stewardship. Non-compliance could lead to significant fines, up to 5% of annual net worldwide revenue, reflecting a broader global trend of holding companies accountable for the actions of their entire value chain.
John Prell, Assistant General Counsel for VIKAND and co-author of the paper, emphasized the importance of these regulations: “The future is now. The new EU Supply Chain laws build upon recent maritime regulations, including the latest MLC Amendments, and serve as a call to action for maritime companies to prioritize and address seafarer welfare.”
Transforming maritime companies
According to the report, as maritime companies adjust to new due diligence requirements, focusing on both effective communication and a supportive social environment will help meet compliance standards and support seafarers’ mental health. Practical steps, such as checklists for social activities and communication practices, can guide the creation of a more connected and positive onboard experience.
The introduction of the CSRD and the upcoming EU Supply Chain Act (CSDDD) is pushing maritime companies and global trade entities into a fundamental transformation to address seafarer welfare and sustainability, where compliance extends beyond merely ticking boxes; it involves a genuine commitment to improving the lives of those who are essential to global trade.
Modern workforce solutions for seafarer well-being
To support maritime (related) companies in this transformation, a variety of modern workforce solutions that focus on seafarer well-being through better health measures, smart communication, collaboration, and proactive care are available in the market and can be roughly clustered (and taken on as projects) as follows:
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Proactive and holistic healthcare: IP-based video applications and platforms provide easy two-way access to proactive medical care, mental health support, regular wellness reviews, and real-time advice for seafarers, vessels, and fleets. These solutions are crucial for meeting the social sustainability criteria of the CSRD and the due diligence requirements of the EU Supply Chain Act (CSDDD), ensuring seafarers receive the essential support needed for optimal health and performance.
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Real-time seafarers feedback: Network-integrated systems, supported by AI, sample seafarers’ opinions and behavior to provide continuous real-time and anonymous feedback about their onboard experiences. This allows managers to swiftly identify and address issues, enhancing operational safety and responsiveness while meeting the CSRD’s social sustainability requirements.
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Health risk profiling and advice: AI-powered data management and analysis tools integrate and interpret healthcare data into actionable insights and necessary proactive interventions relative to seafarers’ health risk profiles. These tools support compliance with the CSRD’s double materiality assessments and the CSDDD due diligence requirements, enabling effective reporting on social and environmental impacts.
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Enhanced collaboration software: Software applications that improve communication between seafarers, their company, and their social stakeholders foster better human capital management and drive sustainability in the shipping sector from a social perspective.
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Automated auditing and reporting: Integrated reporting systems provide real-time status and automated auditing, ensuring visibility of compliance across all aspects of seafarer well-being and company operations.
