CSDDD – Corporate Sustainability Due Diligence Directive

Overview

The Corporate Sustainability Due Diligence Directive (CSDDD) is the EU’s supply chain directive. It requires large companies to exercise human rights and environmental due diligence in their business relationships and supply chains.

Who Is Affected?

The CSDDD applies in phases to companies above certain thresholds:

• From 2027: Companies with >5,000 employees and >EUR 1,500 million net turnover
• From 2028: Companies with >3,000 employees and >EUR 900 million net turnover
• From 2029: Companies with >1,000 employees and >EUR 450 million net turnover
• Non-EU companies with corresponding turnover in the EU are also included

Core Obligations

1. Due diligence: Identify, prevent, and mitigate adverse impacts on human rights and the environment
2. Chain of activities: Due diligence along the entire value chain (upstream and downstream)
3. Climate plan: Companies must adopt a climate transition plan
4. Complaints mechanism: Establish a grievance procedure for affected parties
5. Civil liability: Companies can be held liable for damages

National Transposition

The CSDDD must be transposed into national law by 2026:

• Germany: The existing LkSG will be adapted to meet CSDDD requirements
• Austria: New national legislation required
• Switzerland: No direct transposition obligation, but Art. 964j ff. CO contains due diligence obligations on conflict minerals and child labour