EU Corporate Sustainability Due Diligence Directive: Transposition & 'Omnibus' Updates
On 25 July 2024, the Corporate Sustainability Due Diligence Directive (CSDDD) entered into force. The 27 EU Member States now have until 26 July 2026 to transpose it into national legislation. While some Member States like Germany and France already have due diligence laws that require adjustments to comply with the Directive, other Member States will need to enact new legislation.
The CSDDD establishes legal obligations for businesses to respect human rights and the environment. Large companies based or operating in the EU market are required to carry out human rights and environmental due diligence across their global "chains of activities." The Directive also empowers victims of corporate abuse to take legal action against companies in the national courts of EU Member States. It emphasises smart and focused action as well as protections for SMEs.
According to new analysis from SOMO, less than 3,400 EU-based corporate groups fall under the Directive's scope, which is substantially lower than a simple count of companies would suggest (the European Commission estimates 6,000 companies fall under the directive).
The CSDDD represents a compromise reached after a long and intense legislative process. For background on the lead-up to the political agreement between EU co-legislators of 14 December 2023, please refer to this story. For details on the CSDDD's final yet tumultuous journey in 2024 until its formal entry into force, please refer to this story. Both stories include accounts of the unprecedented support many businesses have had for the CSDDD.
Below we track CSDDD developments during its transposition phase, including transposition progress across the EU as well as reactions, guidance, and analyses from NGOs and other stakeholders.
Omnibus 'simplification' agenda
The EU Commission President's recent announcement of a potential Omnibus law supposed to 'streamline' key instruments of the EU Green Deal (CSDDD, CSRD, Taxonomy) has sparked concerns from business, civil society and beyond, which we are also documenting in the timeline below. "European lawmakers must hold their nerve", Heidi Hautala and Phil Bloomer comment in Reuters in light of the current deregulation push and 'bureaucratic burden' rethoric.
National transposition drafts & consultations
- Netherlands: On 18 November 2024, the Dutch legislator introduced the Corporate International Responsibility Act (Wet Internationaal Verantwoord Ondernemen) (only in Dutch); stakeholders were asked to provide feedback on the proposal to the Ministry of Foreign Affairs until 29 December 2024.
- Finland: The Govt. reportedly set up a working group running until September to prepare a national transposition proposal.
- Sweden: The Govt. last year announced plans to appoint a special investigator & reportedly intends to set up an expert group for transposition.
- Germany: The Federal Ministry of Labour has been working "intensively" on a draft transposition law, while upcoming elections add a point of uncertainty.
- Other Member States have also started working on transposition and we will add draft laws and consultation links as they become available online.
Read the unofficial English translation of the Dutch draft here:
Transposition guidance from CSOs and others
- Transposition Guide for the CSDDD, ECCJ in collaboration with 8 CSOs, 12 Nov 2024
- Towards a gender-responsive transposition of the CSDDD, ActionAid, 28 Oct 2024
- Corporate Environmental Due Diligence and Reporting in the EU, Frank Bold & ClientEarth, 19 September 2024
- Transposition of the Corporate Sustainability Due Diligence Directive: A practical guide for National Human Rights Institutions, Danish Institute for Human Rights, 16 Sept 2024
Analysis & guidance for practical implementation
- SOMO's CSDDD Datahub, SOMO, 21 January 2025
- The European Commission published a set of FAQs on the CSDDD and will issue general and sector-specific guidelines; a first online consultation on guidance is about to be scheduled.
- The EU Corporate Sustainability Due Diligence Directive - How to implement it for children's rights, UNICEF, Oct 2024 (incl. recs for transposition)
- EU Corporate Sustainability Due Diligence Directive: Anti-Slavery International’s analysis, ASI, Oct 2024 (incl. recs for transposition)
- Towards New Human Rights and Environment Due Diligence Laws: Reflections on Changes in Corporate Practice, BIICL, 15 Oct 2024
- Overview of the Corporate Sustainability Due Diligence Directive; Advancing Corporate Responsibility, ECCJ, 24 May 2024