CSDDD: The EU supply chain act
This is what the EU's Corporate Sustainability Due Diligence Directive is all about
Specifically, it concerns:
| Company size | Revenue | Affected from |
|---|---|---|
| 5.000+ employees | 1,5+ billion euros | 2027 |
| 3.000+ employees | 900+ billion euros | 2028 |
| 1.000+ employees | 450+ billion euros | 2029 |
On February 26, 2025, the European Commission published a proposal for the Omnibus Regulation.1 The regulation aims to reduce the bureaucratic burden on businesses, especially small and medium-sized enterprises (SMEs). The proposed changes particularly affect the CSRD, CSDDD, the EU Taxonomy Regulation, and other sustainability-related directives. The proposal is currently being reviewed by the European Parliament and the Council. Changes are still possible during this process.
In a free initial consultation, we will determine whether and how your company is affected by the CSDDD and discuss how we can adequately prepare you for the upcoming directive.
| CSDDD | LkSG | |
|---|---|---|
| Scope of application | Considers company size and turnover | Only aims at companies with more than 1,000 employees |
| Environmental aspects | Puts a stronger focus on environmental aspects such as climate change and resource use | Puts less focus here |
| Supply chain | Requires a comprehensive view of the entire supply chain – both upstream and downstream (e.g., transport and storage) | Primarily focuses on direct suppliers |
| Civil liability | Introduces civil liability if companies violate their due diligence obligations | No civil liability |
| Remedy & redress: | Emphasizes the duty to remedy negative impacts on human rights or the environment, including financial compensation for affected parties | No focus on remedy for negative impacts |
Check whether you are affected
Carry out a gap analysis
Plan implementation
The Corporate Sustainability Due Diligence Directive (CSDDD) sets out clear expectations for companies. They must align their business practices with sustainability standards. The directive requires companies to identify and mitigate potential risks.
Detailed risk analyses are a key component of the CSDDD. Companies must proactively identify risks relating to the environment and people. This includes a comprehensive assessment of business activities and their potential consequences.
The CSDDD also includes reporting and transparency requirements. Companies are obliged to report regularly on their sustainability practices. This aspect promotes open communication with stakeholders and the public.
The following measures are essential for compliance:
Training and employee involvement are further pillars of the CSDDD. Companies should ensure that all employees are informed about sustainability principles. This can create a sustainable corporate culture that contributes to improvement.
CSDDD stands for Corporate Sustainability Due Diligence Directive and is an EU-wide directive designed to protect human rights and the environment. It is aimed at large companies and contains certain due diligence obligations that these companies must fulfil along their value chain.
The CSDDD has been in force since 25 July 2024 and must be transposed into national law by the EU member states by July 2026.
The CSRD (Corporate Sustainability Reporting Directive) focuses on sustainability reporting and requires companies to transparently disclose their social and environmental impacts. The CSDDD (Corporate Sustainability Due Diligence Directive), on the other hand, focuses on due diligence and requires companies to identify and address negative impacts of their business activities on human rights and the environment.
The CSRD (Corporate Sustainability Reporting Directive) focuses on sustainability reporting and requires companies to transparently disclose their social and environmental impacts. The CSDDD (Corporate Sustainability Due Diligence Directive), on the other hand, focuses on due diligence and requires companies to identify and address negative impacts of their business activities on human rights and the environment.
The CSDDD applies to large companies within the EU with more than 1,000 employees and a turnover of over 450 million euros. It also applies to companies from third countries operating in the EU with a net turnover of more than 450 million euros in the EU.
