Case study: Supply chain due diligence legislation (CSDDD) — a city or utility pilot and the results so far

The City of Amsterdam launched its Responsible Procurement Programme in 2020, requiring all municipal purchasing departments to apply human rights and environmental due diligence standards across every contract above EUR 50,000. By the end of 2025, Amsterdam had screened over 4,200 procurement contracts covering EUR 3.8 billion in annual spending, identified forced labor and environmental risks in 14% of its supply chains, and implemented corrective action plans with 312 suppliers across textiles, construction materials, electronics, and food services (City of Amsterdam, 2025). As one of the first European municipal governments to operationalize due diligence requirements that closely mirror the EU Corporate Sustainability Due Diligence Directive (CSDDD), Amsterdam's experience offers a practical blueprint for how public entities can move from policy ambition to measurable supply chain accountability.

Why It Matters

The EU's Corporate Sustainability Due Diligence Directive, adopted in 2024, requires large companies to identify, prevent, mitigate, and account for adverse human rights and environmental impacts across their value chains. Companies with more than 1,000 employees and EUR 450 million in net worldwide turnover fall within scope, with phased implementation beginning in 2027. The directive covers over 13,000 EU-headquartered companies and an estimated 4,000 non-EU companies operating in the European market (European Commission, 2024).

Municipal and regional governments sit at a unique intersection. They are among the largest single purchasers of goods and services in their economies, with EU public procurement accounting for approximately 14% of GDP, or roughly EUR 2 trillion annually. Yet most public entities have historically treated procurement as a cost-optimization exercise rather than a lever for supply chain accountability. The CSDDD does not directly regulate municipal procurement, but its standards are rapidly cascading into public purchasing through national implementing legislation and voluntary adoption by forward-looking cities.

Amsterdam's pilot matters because it demonstrates that due diligence is operationally feasible at municipal scale, produces quantifiable risk reduction, and can be implemented without significantly increasing procurement costs or cycle times. For executives at companies that sell to European public entities, understanding how municipal buyers are applying due diligence standards is increasingly relevant to maintaining market access.

Key Concepts

Understanding Amsterdam's approach requires familiarity with several frameworks and mechanisms that underpin supply chain due diligence at the municipal level.

OECD Due Diligence Guidance for Responsible Business Conduct provides the six-step framework that Amsterdam adopted as its operational backbone: embed responsible business conduct into policies, identify and assess adverse impacts, cease or prevent adverse impacts, track implementation, communicate, and provide for remediation. The CSDDD itself references the OECD framework as the baseline standard.

Risk-based prioritization means that Amsterdam does not apply equal scrutiny to every procurement contract. Instead, the city uses a sector-risk matrix that classifies product categories into high, medium, and low risk tiers based on known prevalence of forced labor, child labor, environmental degradation, and corruption in global supply chains. High-risk categories including natural stone, textiles and workwear, electronics, cocoa and coffee, and timber products receive mandatory enhanced due diligence.

Supplier self-assessment questionnaires (SAQs) are standardized disclosure forms that suppliers must complete during the tendering process. Amsterdam's SAQ covers labor practices, subcontracting transparency, environmental management systems, and grievance mechanisms. SAQ responses are scored and weighted as part of the bid evaluation criteria, typically accounting for 10 to 15% of the total score.

Corrective action plans (CAPs) are binding improvement agreements negotiated with suppliers where due diligence screening identifies risks or non-conformities. CAPs include specific milestones, timelines, and verification requirements. Failure to implement agreed corrective actions can result in contract suspension or exclusion from future tenders.

What's Working

Amsterdam's pilot has produced results across multiple dimensions that other European cities and national governments are now studying for replication.

Risk Identification Rates Exceed Expectations

The city's initial assumption was that enhanced due diligence would identify material risks in approximately 5 to 8% of screened contracts. Actual screening results showed that 14% of contracts had identifiable human rights or environmental risks requiring follow-up, with the highest incidence in natural stone (38% of contracts flagged), workwear and textiles (27%), and electronics (22%). The most common risk findings include lack of supply chain visibility beyond tier-one suppliers, absence of worker grievance mechanisms, inadequate documentation of subcontractor labor conditions, and environmental permit non-compliance at manufacturing facilities (City of Amsterdam, 2025).

Supplier Engagement Produces Measurable Improvements

Of the 312 suppliers placed on corrective action plans since 2021, 74% achieved satisfactory compliance within the agreed timeframes, averaging 12 to 18 months. Concrete outcomes include 89 suppliers establishing formal worker grievance channels for the first time, 46 suppliers completing independent third-party audits of sub-tier manufacturing sites, and 67 suppliers providing traceable sourcing documentation for previously opaque material inputs. The city reports that the collaborative approach, prioritizing improvement over exclusion, has resulted in only 23 suppliers being removed from approved vendor lists during the entire five-year program period.

Procurement Costs Have Not Increased Materially

One of the most significant findings is that responsible procurement has not led to meaningful cost inflation. Amsterdam's Finance Department tracked procurement spend across all categories subject to enhanced due diligence and found that average contract values increased by 1.2% compared to pre-program baselines, well within normal market price fluctuation. In several categories, including workwear and cleaning services, the shift toward longer-term contracts with verified suppliers actually reduced per-unit costs by consolidating purchasing volumes and reducing supplier switching costs.

Cross-City Knowledge Sharing Is Accelerating

Amsterdam co-founded the International Learning Network on Responsible Public Procurement with Utrecht, The Hague, Copenhagen, Helsinki, and Barcelona in 2023. The network now includes 28 European cities and has standardized a common set of due diligence criteria, SAQ templates, and risk assessment tools. This pooling of resources has reduced the per-city cost of developing due diligence capabilities by an estimated 40%, since cities share audit reports, supplier assessments, and training materials rather than duplicating efforts independently.

What's Not Working

Despite measurable progress, Amsterdam's pilot has encountered structural challenges that limit depth and scalability.

Sub-Tier Visibility Remains Shallow

The most persistent gap is limited visibility beyond first-tier suppliers. Amsterdam's screening effectively covers direct contractual relationships, but the city estimates that it has meaningful traceability data for only 30 to 35% of tier-two suppliers and less than 10% of tier-three suppliers across high-risk categories. Natural stone supply chains illustrate the problem: the city can verify the quarry of origin for approximately 60% of its paving stone purchases, but working conditions at quarry sites in India, China, and Turkey remain difficult to verify independently. The International Labour Organization estimates that 40 million people globally are in conditions of modern slavery, with the majority concentrated in upstream supply chain tiers that due diligence programs struggle to reach (ILO, 2024).

Capacity Constraints Limit Screening Depth

Amsterdam's responsible procurement team consists of 8 full-time equivalent staff supporting due diligence across 12 purchasing departments. This team manages SAQ review, risk assessment, supplier engagement, and corrective action monitoring for over 4,200 contracts. The resulting workload means that enhanced due diligence with on-site verification is practically limited to the top 50 to 70 highest-risk contracts per year, while the remaining high-risk contracts receive desk-based review only. Several procurement officers have reported that due diligence tasks add 15 to 20 hours per major tender, creating tension with existing workload expectations and timelines.

Legal Enforceability Is Ambiguous

Municipal governments lack the regulatory authority to impose supply chain due diligence requirements with the same legal force as national or EU-level legislation. Amsterdam's program operates primarily through contract clauses and tender evaluation criteria, which can be challenged by suppliers who argue that due diligence requirements create disproportionate barriers to market access. In 2024, a construction materials supplier filed a formal procurement complaint alleging that Amsterdam's natural stone due diligence requirements were discriminatory because they effectively excluded suppliers from countries with weaker labor law enforcement. The complaint was ultimately dismissed, but it consumed significant legal resources and highlighted the uncertain legal footing of municipal-level due diligence mandates.

Verification and Audit Fatigue

Suppliers selling to multiple European public entities increasingly face duplicative due diligence requests, with different cities and national governments using varying questionnaire formats, risk criteria, and audit standards. Several of Amsterdam's key suppliers have reported receiving 10 to 15 separate due diligence questionnaires annually from different public buyers, each with slightly different requirements. This fragmentation increases compliance costs for suppliers without proportionally improving risk identification.

Key Players

Established Organizations

• City of Amsterdam Procurement Office: The lead implementing body, managing due diligence integration across all municipal purchasing departments with a dedicated team of 8 responsible procurement specialists.
• MVO Nederland (CSR Netherlands): Provided technical assistance and sector-specific risk assessment tools that Amsterdam adopted as part of its screening methodology.
• SOMO (Centre for Research on Multinational Corporations): Supplied independent research on supply chain risks in high-priority product categories, particularly natural stone and electronics.
• Fair Wear Foundation: Partnered with Amsterdam on workwear and textiles due diligence, providing audit frameworks and factory-level assessment expertise for garment supply chains.
• International Labour Organization (ILO): Provided baseline data and forced labor risk indicators that inform Amsterdam's sector-risk classification matrix.

Startups and Specialist Providers

• TrusTrace: Supplies digital supply chain mapping technology that Amsterdam piloted in 2024 to improve sub-tier visibility in textiles and electronics procurement.
• Prewave: Provides AI-powered supply chain risk monitoring, scanning news, regulatory filings, and NGO reports to flag emerging risks in real time across supplier networks.
• Open Supply Hub: Offers an open-source facility database that Amsterdam uses to cross-reference supplier-disclosed factory locations against known labor and environmental risk indicators.

Investors and Funders

• European Commission DG GROW: Provided co-funding for the International Learning Network on Responsible Public Procurement under the Single Market Programme.
• Dutch Ministry of Foreign Affairs: Funded the initial development of the sector-specific International Responsible Business Conduct agreements that Amsterdam's program builds upon.
• C40 Cities: Provided technical advisory support and facilitated knowledge exchange with other C40 member cities implementing responsible procurement programs.

KPI Summary

KPI	Baseline (2020)	Current (2025)	Target (2028)
Contracts screened annually	0	4,200	5,500
Annual spend under due diligence (EUR)	0	3.8 billion	4.5 billion
Suppliers on corrective action plans	0	312	500
CAP compliance rate	N/A	74%	85%
Sub-tier visibility (tier 2)	0%	32%	55%
Procurement cost increase vs. baseline	N/A	1.2%	<2%
Cities in learning network	1	28	50

Action Checklist

• Conduct a spend analysis to identify high-risk product categories using the OECD sector-risk classifications and ILO forced labor indicators as reference frameworks
• Develop or adopt a standardized supplier self-assessment questionnaire covering labor practices, subcontracting transparency, environmental management, and grievance mechanisms
• Integrate due diligence criteria into tender evaluation scoring, weighting responsible supply chain management at 10 to 15% of total bid assessment
• Establish a dedicated responsible procurement function with at least one full-time specialist per EUR 500 million in annual purchasing spend
• Join or establish a municipal learning network to pool due diligence resources, share supplier audit reports, and standardize assessment criteria across jurisdictions
• Pilot digital supply chain mapping tools to extend visibility beyond tier-one suppliers in at least two high-risk procurement categories
• Implement corrective action plan protocols that prioritize supplier improvement over exclusion, with clear milestones, timelines, and escalation procedures

FAQ

Q: Does the CSDDD directly require municipal governments to conduct supply chain due diligence? A: The CSDDD primarily targets large private-sector companies meeting the employee and revenue thresholds. Municipal governments are not directly within scope. However, national implementing legislation in several EU member states is extending due diligence obligations to public procurement. Germany's Supply Chain Due Diligence Act (LkSG), for example, already applies to companies with 1,000 or more employees, and German municipalities have begun incorporating LkSG-aligned requirements into tender specifications. The Netherlands is developing similar guidance. Cities like Amsterdam have adopted due diligence voluntarily, using their purchasing power to drive supply chain improvements independent of direct legal mandates.

Q: How much does it cost to implement municipal-level supply chain due diligence? A: Amsterdam's program operates with an annual budget of approximately EUR 1.2 million, covering staff costs for 8 FTE specialists, external audit and verification fees, digital tools and platform subscriptions, and participation in the learning network. This represents roughly 0.03% of the city's total procurement spend. The city estimates that joining the 28-city learning network reduced its per-city implementation costs by approximately 40% compared to building all capabilities independently. For procurement cost impact, Amsterdam's data shows an average contract value increase of 1.2%, which the city considers within normal price variability and offset by risk reduction benefits.

Q: What happens when a supplier fails to meet corrective action plan requirements? A: Amsterdam follows a graduated enforcement approach. When a supplier misses CAP milestones, the first step is a structured dialogue to understand barriers and adjust timelines if the supplier demonstrates good faith progress. If a supplier shows no meaningful improvement after 6 months, the city issues a formal warning and may reduce contract volumes. Persistent non-compliance after 12 months can result in contract suspension and temporary exclusion from future tenders. Full exclusion from the approved vendor list is reserved for cases of willful non-compliance or verified severe human rights violations. Since 2021, only 23 suppliers out of 312 placed on CAPs have been removed from approved vendor lists, reflecting the program's emphasis on engagement over punishment.

Q: Can this model work in cities with smaller procurement budgets? A: The Amsterdam model scales down effectively because the core approach is risk-based prioritization rather than universal screening. Smaller cities can begin by focusing due diligence on the two or three highest-risk product categories, typically natural stone, textiles, and electronics, which account for the majority of identifiable human rights risks in municipal supply chains. Participation in collaborative networks like the International Learning Network on Responsible Public Procurement provides access to shared tools, templates, and supplier assessment data that reduce startup costs. Copenhagen and Helsinki implemented initial due diligence programs with two FTE specialists each, covering their top five risk categories, and reported first-year implementation costs under EUR 300,000.

Sources

• City of Amsterdam. (2025). Responsible Procurement Programme: Five-Year Implementation Review and Outcomes Report. Amsterdam: Gemeente Amsterdam.
• European Commission. (2024). Corporate Sustainability Due Diligence Directive: Impact Assessment and Scope Analysis. Brussels: European Commission DG Justice.
• International Labour Organization. (2024). Global Estimates of Modern Slavery: Forced Labour and Forced Marriage. Geneva: ILO.
• MVO Nederland. (2025). Sector Risk Analysis for Responsible Public Procurement: Updated Risk Classifications and Assessment Tools. Utrecht: MVO Nederland.
• SOMO. (2024). Rock Bottom: Modern Slavery and Child Labour in the Natural Stone Supply Chain. Amsterdam: Centre for Research on Multinational Corporations.
• C40 Cities. (2025). Responsible Procurement in Practice: Municipal Case Studies from the C40 Network. London: C40 Cities Climate Leadership Group.
• German Federal Office for Economic Affairs and Export Control (BAFA). (2025). Supply Chain Due Diligence Act: Implementation Report and Compliance Statistics. Eschborn: BAFA.
• Fair Wear Foundation. (2025). Workwear and Institutional Textiles: Due Diligence Findings from Public Procurement Programmes. Amsterdam: Fair Wear Foundation.