CSDDD — Corporate Sustainability Due Diligence Directive
EU-wide supply chain due diligence for human rights and environmental impacts. Applies from 26 July 2029 to the largest companies, after transposition by 26 July 2028.
Overview
The Corporate Sustainability Due Diligence Directive (CSDDD/CS3D) — Directive (EU) 2024/1760 — requires large companies to identify, prevent, and mitigate adverse human rights and environmental impacts throughout their value chains. Scope was narrowed significantly by the Omnibus package.
Legal basis
- Proposed: 23 February 2022
- Adopted: 24 May 2024
- Entered into force: 25 July 2024
- Amended by: Omnibus Directive (EU) 2026/470 (published OJ 26 February 2026; in force 18 March 2026)
- Transposition deadline: 26 July 2028 (Art. 37(1) as replaced by Directive (EU) 2026/470; this supersedes the 26 July 2027 date set by "stop-the-clock" Directive (EU) 2025/794)
- Application: 26 July 2029, one date for all in-scope companies
- Reporting (Art. 16): applies for financial years starting on or after 1 January 2030
Scope (post-Omnibus)
- EU companies: >5,000 employees AND >1.5 billion net turnover
- Non-EU companies: >1.5 billion net turnover generated in EU
- Original thresholds (before Omnibus): 1,000 employees and 450M turnover
Core requirements
Companies in scope must:
- Integrate due diligence into corporate policies and risk management
- Identify adverse impacts on human rights and environment in own operations, subsidiaries, and business partner chain
- Prevent and mitigate potential adverse impacts (prioritised by severity)
- Bring to an end actual adverse impacts
- Establish grievance mechanisms for affected persons
- Monitor effectiveness of due diligence measures
- Communicate publicly through annual sustainability statement
Key Omnibus changes
- No mandatory climate transition plan requirement
- "Scoping exercise" instead of comprehensive supply chain mapping
- In-depth assessment only for most likely and severe impacts
- SME partners (fewer than 1,000 employees) protected from excessive information demands
Timeline
| Date | Event |
|---|---|
| 25 July 2024 | Entered into force |
| 18 March 2026 | Omnibus Directive (EU) 2026/470 enters into force |
| 26 July 2027 | Commission general due diligence guidelines due (Art. 19(3), points (a), (d) and (e)), with guidance on model contractual clauses |
| 26 July 2028 | Member State transposition deadline; Member States notify the Commission of their designated supervisory authorities (Art. 24(7)); further Commission guidelines due (Art. 19(3), points (f) and (g)) |
| 26 July 2029 | Application for all in-scope companies (>5,000 employees, >€1.5B turnover) |
| FY starting on or after 1 January 2030 | Reporting obligation under Art. 16 applies |
Penalties
Administrative penalties under Art. 27 are set by member states within an EU-wide ceiling:
- Uniform maximum pecuniary penalty of 3% of net worldwide turnover, set by Omnibus Directive (EU) 2026/470 (the original text required the maximum to be at least 5%)
- Market access restrictions for continued non-compliance
- Civil liability (Art. 29) amended by Omnibus Directive (EU) 2026/470: the EU-wide liability rule in Art. 29(1) is deleted, so liability follows national law. Where a company is held liable under national law, those harmed have a right to full compensation (Art. 29(2))
Who is affected
Post-Omnibus scope applies from 26 July 2029, a single application date for all in-scope companies:
- EU companies with more than 5,000 employees AND more than €1.5 billion net worldwide turnover
- Non-EU companies with more than €1.5 billion net turnover generated in the EU (no employee threshold for non-EU)
Original pre-Omnibus thresholds (1,000 employees and €450M turnover) captured substantially more companies. The Omnibus narrowing removes the vast majority of originally in-scope businesses from mandatory compliance.
SME partners with fewer than 1,000 employees are explicitly protected from excessive information demands from in-scope companies.
Key articles
| Article | Subject |
|---|---|
| Art. 7 | Identifying and preventing potential adverse impacts |
| Art. 8 | Addressing actual adverse impacts |
| Art. 22 | Combating climate change (transition plans): deleted by Omnibus Directive (EU) 2026/470 |
| Art. 27 | Penalties: uniform maximum of 3% of net worldwide turnover (as amended by Directive (EU) 2026/470) |
| Art. 29 | Civil liability: amended by Directive (EU) 2026/470; liability follows national law, with a right to full compensation |
Relevance to DPP
CSDDD does not mandate a DPP, but DPP infrastructure supports compliance:
- Product-level traceability data helps demonstrate supply chain provenance
- Material sourcing data in DPP supports due diligence documentation
- Companies with robust DPP systems can more easily demonstrate supply chain transparency