Directive on Corporate Sustainability Due Diligence (CSDD)

This proposal amends Directive (EU) 2019/1937 with the aim of fostering sustainable and responsible corporate behaviour throughout global value chains. Under the proposal, companies will be required to identify and, where necessary, prevent, end or mitigate adverse impacts of their activities on human rights (e.g. child labour and exploitation of workers) and on the environment (e.g. pollution and biodiversity loss). The proposal applies to a company's own operations, as well as to their subsidiaries and their value chains (direct and indirect established business relationships). In order to comply with the corporate due diligence duty, companies must: 

• integrate due diligence into policies; 
• identify actual or potential adverse human rights and environmental impacts; 
• prevent or mitigate potential impacts; 
• bring to an end or minimise actual impacts; 
• establish and maintain a complaints procedure; 
• monitor the effectiveness of the due diligence policy and measures;
• publicly communicate on due diligence.

A proposal was made on May 5, 2025 (referred to as the omnibus simplification package), to the EU Parliament and Council to delay the application of corporate sustainability reporting and due diligence requirements by one to two years for certain companies, simplifying the regulatory framework. It reduces mandatory reporting to larger companies and introduces voluntary standards for smaller ones. Additionally, it removes sector-specific standards and assurance requirements to ease administrative burdens.

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