Corporate Sustainability Due Diligence Directive
European directive imposing mandatory human-rights and environmental due diligence over a company's own operations and chain of activities. Directive (EU) 2024/1760 published in the OJEU on 5 July 2024.
Context
CSDDD (Corporate Sustainability Due Diligence Directive) is the European directive that requires companies to carry out human-rights and environmental due diligence over their own operations and their chain of activities. Codified in Directive (EU) 2024/1760.
Regulatory origin
Directive (EU) 2024/1760 of the European Parliament and of the Council of 13 June 2024, published in the OJEU L of 5 Jul 2024. Entry into force 25 Jul 2024.
The 6 stages of due diligence (Arts. 7-12)
Integrate due diligence into policies and management systems (Art. 7).
Identify and assess actual or potential adverse impacts (Art. 8).
Prevent or mitigate potential adverse impacts (Art. 10).
Bring to an end, minimise or remediate actual adverse impacts (Art. 11).
Establish notification mechanisms and a complaints procedure (Art. 14).
Monitor the effectiveness of due diligence and communicate publicly (Arts. 15-16).
Timeline
CSDDD adopted
Directive (EU) 2024/1760 approved by Parliament and Council.
Entry into force
20 days after publication in the OJEU.
Wave 1 application
Companies with more than 5,000 employees and more than EUR 1,500M worldwide turnover.
Wave 2 application
Companies with more than 3,000 employees and more than EUR 900M worldwide turnover.
Wave 3 application
Companies with more than 1,000 employees and more than EUR 450M worldwide turnover.
Applied case
A textile brand assesses its CSDDD exposure. It is not a direct subject (it falls below the wave 3 threshold) but, as a supplier to a large client subject to CSDDD, it receives cascaded contractual pressure to implement due diligence over its value chain.
The large client (CSDDD wave 1 subject) requires it to fulfil the 6 due-diligence stages across its value chain covering cotton, spinning and garment-making.
The brand implements supplier onboarding with a code of conduct based on the UN Guiding Principles + OECD Garment Guidance + ILO fundamental conventions.
It sets up a complaints notification mechanism accessible to workers in the chain (in their local language) with a 30-day response SLA.
It reports annually on the effectiveness of its due diligence on its website · with no CSRD obligation but required by the client.
Common mistakes
The CSDDD is not just "having a code of conduct".
It is an operational due-diligence system with monitoring, complaints mechanisms, public communication and civil liability. A code of conduct signed by a supplier is a starting point, not compliance.
The CSDDD does not exempt you from the EUDR or the Forced Labour Regulation.
They are parallel regimes. The CSDDD is a general framework; the EUDR and the Forced Labour Regulation are specific obligations that are fulfilled with or without the CSDDD.
Not being subject to the CSDDD does not exempt you from the cascade effect.
The tier 2/3 suppliers of subject companies receive derived contractual information requirements. The pressure arrives via contract, not via direct law.
The CSDDD is not the European transposition of the German LkSG.
The German LkSG of 2021 partly inspired the CSDDD, but both coexist with different calibrations. The transposition of the CSDDD in Germany interacts with the LkSG; it does not automatically replace it.
Frequently asked questions
What is the CSDDD?
Directive (EU) 2024/1760 Corporate Sustainability Due Diligence Directive, published in OJEU L of 5.7.2024 (CELEX 32024L1760). Under Art. 1: it lays down obligations for companies regarding actual and potential adverse impacts on human rights and the environment, with respect to their own operations, the operations of their subsidiaries and the operations of their business partners in their chains of activities.
Which companies does the CSDDD apply to?
Progressive application under Art. 37: (i) >5,000 employees and >EUR 1,500M worldwide turnover from 2027, (ii) >3,000 employees and >EUR 900M from 2028, (iii) >1,000 employees and >EUR 450M from 2029. Non-EU companies with equivalent EU net turnover also apply.
How is the CSDDD complied with?
Through 6 steps in line with the UN Guiding Principles on Business and Human Rights and the OECD Due Diligence Guidance: (i) integrate due diligence into policies, (ii) identify adverse impacts, (iii) prevent/mitigate/end impacts, (iv) monitor effectiveness, (v) public communication, (vi) remediation. Additionally Art. 22: climate transition plan aligned with the 1.5-degree Paris Agreement.
What is the difference between the CSDDD and the CSRD?
The CSDDD requires active due diligence (behaviour). The CSRD requires reporting sustainability information (disclosure). A CSDDD company reports its due-diligence programme under ESRS-CSRD (explicit interaction with ESRS S1-S4 + G1). They can coexist or apply separately depending on size.
What is the difference between the CSDDD and the EUDR?
The CSDDD is a cross-cutting regime over the entire chain of activities (tier 1, tier 2, tier 3+). The EUDR is a specific regime with an operational system (TRACES) for 7 commodities at risk of deforestation. The CSDDD does not replace the EUDR; both coexist for companies with EUDR commodities in their chain.
What penalty is there for breaching the CSDDD?
Under Art. 27: penalties defined by each Member State but with a harmonised minimum of 5 per cent of worldwide net turnover of the financial year for serious infringements. Additionally, civil liability towards victims (Art. 29) and exclusion from public procurement. Transposition deadline 26 Jul 2026.
Fuentes oficiales
- European Parliament and Council · OJEU L, 5 Jul 202413 jun 2024Directive — legislation in force
- European Parliament and Council · OJEU Series L, 26 Feb 20262024-2026Amending directive — threshold reform
- Organisation for Economic Co-operation and Development · OECD2023International reference framework
