EU officially publishes CSDDD

July 9th, 2024

The European Union (EU) has officially released the Corporate Sustainability Due Diligence Directive (CSDDD), which will soon be adopted into EU member states’ law.

Following a final vote by the European Parliament, the framework has been approved and published in the Official Journal of the EU.

Now that the directive has been approved, EU member states will have just over two years to transpose the CSDDD into their national law, with the deadline set as 26 July 2026.

The regulations require companies to implement climate transition plans to make their business model compatible with the Paris Agreement global warming limit of 1.5°C.

Companies also need to disclose the impact of their value chains on human rights and the environment.

The originally proposed rules would apply these requirements to all companies with 500 or more employees and a turnover over €150 million, but these were criticised by some member states, including Germany and Italy, over the potential bureaucratic and legal impacts they could have on companies.

The final approved version was voted on by the European Parliament in April.

Under the new rules, the regulations will apply to EU companies with more than 5000 employees and a net worldwide turnover of more than €1.5 million, and non-EU companies with more than €1.5 million net turnover in the EU from July 2027.

By July 2028, EU companies with more than 3000 employees and a worldwide turnover of more than €900 million and non-EU companies with more than €900 million net turnover in the EU will fall under the regulations.

EU companies with more than 1000 employees and a worldwide turnover of more than €450 million and non-EU companies with more than €450 million net turnover in the EU will fall under the rules from July 2029.

Eurosif noted that by 26 July 2026, the European Commission will have assessed the extension of due diligence requirements to the downstream part of the value chain for financial institutions under scope.

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