CSDDD — Corporate Sustainability Due Diligence Directive

The Corporate Sustainability Due Diligence Directive (CSDDD) (Directive (EU) 2024/1760) requires large companies to conduct due diligence on human rights and environmental protection in their own operations and throughout their entire value chain — including upstream and downstream business partners.

The directive follows a risk-based approach: companies must identify, prevent, mitigate, and remediate actual and potential adverse impacts on human rights and the environment. This includes impacts in their own operations, at subsidiaries, and at business partners in their chain of activities.

A key element is civil liability: affected persons can sue companies for damages if they breach their due diligence obligations. Furthermore, companies must adopt a climate transition plan compatible with the Paris Climate Agreement and the goal of climate neutrality by 2050.

On 23 February 2022, the European Commission presented the proposal for the CSDDD. On 1 December 2022, the Council adopted its position, followed by the European Parliament on 1 June 2023. On 15 December 2023, the Council and Parliament reached a provisional political agreement.

The vote in the Council initially failed on 28 February 2024 due to the required qualified majority not being reached, after which a significantly weakened version was negotiated that received qualified majority support on 15 March 2024. The European Parliament adopted the directive on 24 April 2024, and the Council gave its formal approval on 24 May 2024. Directive (EU) 2024/1760 is dated 13 June 2024, was published in the Official Journal on 5 July 2024, and entered into force on 25 July 2024.

The original transposition deadline of July 2026 was postponed to 26 July 2027 by the Stop-the-Clock Directive (EU) 2025/794. The Stop-the-Clock Directive retained the phased approach, shifting each phase by one year: the first wave (companies with over 5,000 employees and over EUR 1.5bn net turnover) applies from 26 July 2028, the second wave from 26 July 2029, and the third wave from 26 July 2030.

The CSDDD applies to large companies established in the EU and certain third-country companies:

• EU companies: Companies with over 1,000 employees and a worldwide net turnover exceeding EUR 450 million (thresholds per the March 2024 compromise text).
• Third-country companies: Companies with a net turnover exceeding EUR 450 million in the EU, provided they have at least one large subsidiary or branch in the EU.
• Value chain: Due diligence obligations extend across the entire chain of activities — from raw material extraction through production to distribution and recycling — including upstream and downstream business partners.
• Exceptions: SMEs are not directly affected but may indirectly face requirements as business partners in the value chains of covered companies.

• Due diligence: Establishment and implementation of a risk-based due diligence policy integrated into business strategy and processes.
• Identification and assessment: Identification of actual and potential adverse impacts on human rights and the environment in own operations and in the chain of activities.
• Prevention and mitigation: Taking appropriate measures to prevent potential and to end or minimise actual adverse impacts.
• Complaints mechanism: Establishment of a complaints procedure for affected persons, trade unions, and civil society organisations.
• Climate transition plan: Adoption and implementation of a climate transition plan compatible with the 1.5°C target of the Paris Agreement and EU climate neutrality by 2050.
• Civil liability: Companies are civilly liable for damages resulting from breaches of their due diligence obligations; affected persons may claim damages.
• Administrative sanctions: National supervisory authorities may impose fines of up to 5% of global net turnover.

The key_dates include the postponed transposition deadline of 26 July 2027 but no first-wave application date. Under the Stop-the-Clock Directive the CSDDD applies to the first wave (over 5,000 employees / over EUR 1.5bn net turnover) from 26 July 2028.

The history text claims that under the Stop-the-Clock Directive (EU) 2025/794 application is 'uniform from 26 July 2029'. Incorrect. The Stop-the-Clock Directive retained the phased approach, shifting each phase by one year: first wave from 26 July 2028, second from 26 July 2029, third from 26 July 2030. A uniform 2029 date came only from the later Omnibus Directive (EU) 2026/470.