CSDDD (“Directive (EU) 2024/1760 on corporate sustainability due diligence and amending Directive (EU) 2019/1937 and Regulation (EU) 2023/2859”) was formally published in the Official Journal of the European Union on 5 July 2024. CSDDD introduces due diligence obligations for large EU (indicatively having more than 1,000 employees and net worldwide turnover exceeding Euro 450 million) and non-EU companies meeting certain criteria, which aim at the prevention and mitigation of adverse impacts on human rights and the environment, emerging from their operations, their subsidiaries’ operations, and their business partners as well as part of their chain of activities.
Companies’ human rights and environmental risk-based due diligence obligations include:
incorporation of due diligence practices into their policies and risk management systems and implementation thereof;
adoption of proper measures regarding identification, assessment, prevention, mitigation and termination of adverse impacts;
adoption of remedial actions as the case may be;
engagement with stakeholders;
establishment of notification mechanisms and complaints procedure;
along with the responsibility to assess periodically both their operations and due diligence measures adopted, along their whole chain of activities.
Furthermore, CSDDD introduces for in-scope companies an additional obligation regarding the adoption and implementation of a climate transition plan aiming at a more environmentally sustainable business model, mitigation of global warming as per the Paris Agreement and achievement of climate neutrality.
Member States must transpose the CSDDD in their national law by 26 July 2026. The deadlines for the adoption of above measures vary depending mainly on the size of the companies in scope, and are set at 26 July 2027 or 26 July 2028 or 26 July 2029, as the case may be.
