Corporate Sustainability Due Diligence Directive

Published on 21 May 2024 · Last updated 23 October 2026

The Corporate Sustainability Due Diligence Directive (CSDDD), Directive (EU) 2024/1760, requires very large companies to identify and address adverse human rights and environmental impacts in their own operations, their subsidiaries and their chains of activities. Following the 2026 “Omnibus I” amendments, it covers EU companies with more than 5,000 employees and a net worldwide turnover above EUR 1.5 billion, and applies from 26 July 2029.

Below, our Dutch attorneys (advocaten) explain what the directive requires, which amendments have been adopted and what that means in practice. Our team also advises on the radio equipment directive.

What is the Corporate Sustainability Due Diligence Directive?

The CSDDD lays down rules on obligations for companies regarding actual and potential adverse human rights and environmental impacts in their own operations, the operations of their subsidiaries and the operations of their business partners in their chains of activities (Article 1(1)). It also covers liability for violations of those obligations.

This directive aims to ensure that businesses, including their subsidiaries and business relationships, operate sustainably and responsibly.

What is the background of the CSDDD?

The CSDDD is part of the EU’s sustainability agenda and builds on international standards for responsible business conduct. Its core is a risk-based due diligence process: companies must identify, prevent, mitigate, bring to an end and remedy adverse impacts on human rights and the environment (Article 5).

The original text also required companies to adopt a climate transition plan (Article 22). That obligation was deleted by Directive (EU) 2026/470, which entered into force on 18 March 2026. The due diligence obligations themselves remain.

Who does the CSDDD apply to?

The CSDDD applies to a company formed under the law of an EU Member State if, in the last financial year, it had more than 5,000 employees on average and a net worldwide turnover of more than EUR 1,500,000,000 (Article 2(1)(a), as amended in 2026). It also applies to the ultimate parent company of a group that reaches those thresholds, and to franchisors and licensors with EU royalties above EUR 75,000,000 and a net worldwide turnover above EUR 275,000,000 (Article 2(1)(b) and (c)). The thresholds must be met in two consecutive financial years (Article 2(5)).

Companies formed under the law of a third country are covered if they generated a net turnover of more than EUR 1,500,000,000 in the EU in the financial year preceding the last financial year, or if they are the ultimate parent of a group that reached that threshold (Article 2(2)). Small and medium-sized enterprises are not directly covered, and there is no separate scope for high-risk sectors. SMEs can still receive information requests as business partners of a company in scope; for the purposes of the in-depth assessment, companies may request information only where it is necessary and, for business partners with fewer than 5,000 employees, only when it cannot reasonably be obtained by other means (Article 8(2a)(a)).

What does the CSDDD mean for corporate governance?

The CSDDD requires companies to integrate due diligence into all their relevant policies and risk management systems, with a due diligence policy that is reviewed and, where necessary, updated at least every 24 months (Article 7). The Commission’s 2022 proposal also contained a duty of care for directors, but that provision did not make it into the adopted text.

The adopted text does not contain a separate duty of care for directors; directors’ duties remain governed by national company law. The directive instead places the due diligence obligations on the company itself.

What are the key aspects of the CSDDD?

MAAK Advocaten is a specialized Dutch law firm in Amsterdam that focuses on all legal matters related to the Corporate Sustainability Due Diligence Directive (CSDDD). Please see enclosed the key aspects related to the CSDDD:

Scope: EU companies with more than 5,000 employees and a net worldwide turnover above EUR 1.5 billion, ultimate parent companies of groups reaching those thresholds, and non-EU companies with a net turnover above EUR 1.5 billion in the EU (Article 2).
Risk-based due diligence: companies first carry out a scoping exercise based on reasonably available information, and then an in-depth assessment of the areas where adverse impacts are most likely and most severe (Article 8(2)).
Prevention and remediation: appropriate measures such as a prevention action plan, contractual assurances from direct business partners, and support for SME business partners (Articles 10 to 12).
No climate transition plan obligation: Article 22 was deleted by Directive (EU) 2026/470.
Civil liability: the specific EU-wide liability regime was removed. Where a company is held liable under national law for damage caused by a failure to comply with the due diligence requirements, the injured party has a right to full compensation, without overcompensation (Article 29(2)).
Enforcement: national supervisory authorities supervise compliance (Articles 24 and 25). The maximum limit of pecuniary penalties is set at 3% of the company’s net worldwide turnover (Article 27(4)).

The CSDDD aims to harmonize legal frameworks across the EU, create a level playing field, increase transparency, and provide access to justice for victims of corporate human rights and environmental abuses. However, concerns have been raised about potential unintended consequences and the need for harmonized implementation.

Which obligations does the CSDDD impose on companies in scope?

As a Dutch law firm, MAAK Advocaten provides thorough legal advice on compliance with the CSDDD regulations. Important under the CSDDD are also the key obligations on Dutch companies. The Corporate Sustainability Due Diligence Directive (CSDDD) imposes for example the following key obligations:

Conduct due diligence: companies must identify and assess adverse human rights and environmental impacts and prevent, mitigate, bring to an end, minimise and remediate them, in their own operations, their subsidiaries and their chains of activities (Article 5). This includes:

Developing prevention action plans
Obtaining contractual assurances from business partners
Investing in and supporting business partners, especially SMEs.

Stakeholder engagement and complaints: companies must consult relevant stakeholders at set stages of the due diligence process (Article 13) and provide a notification mechanism and complaints procedure (Article 14).
Monitoring: companies must assess the adequacy and effectiveness of their measures periodically, at least every 5 years and whenever there are reasonable grounds to believe that the measures are no longer adequate (Article 15).
Reporting: companies must publish an annual statement on their website (Article 16), for financial years starting on or after 1 January 2030.
Liability: Member States must ensure that, where a company is held liable under national law for damage caused by a failure to comply, the injured party has a right to full compensation (Article 29(2)).

When does the CSDDD apply?

The CSDDD was adopted on 13 June 2024. Directive (EU) 2025/794 (“stop-the-clock”) first postponed the transposition deadline and the first application dates. Directive (EU) 2026/470 then replaced those dates. Under the current text, Member States must adopt and publish their implementing laws by 26 July 2028 and apply them from 26 July 2029; the reporting obligation in Article 16 applies for financial years starting on or after 1 January 2030 (Article 37(1)).

Companies will be bound through the national law of the competent Member State: for EU companies, the Member State of the registered office; for non-EU companies, in principle the Member State where they have a branch (Article 2(6) and (7)). For Dutch companies, that is the Dutch implementing act, which must be adopted by 26 July 2028.

Frequently asked questions about the CSDDD

Does the CSDDD apply to non-EU companies?

Yes, if the company generated a net turnover of more than EUR 1,500,000,000 in the EU in the financial year preceding the last financial year, or is the ultimate parent of a group that reached that threshold (Article 2(2) CSDDD, as amended in 2026). The competent Member State is in principle the one where the company has a branch (Article 2(7)).

From when do companies have to comply with the CSDDD?

Member States must apply their implementing laws from 26 July 2029. The annual reporting obligation applies for financial years starting on or after 1 January 2030 (Article 37(1) CSDDD, as replaced by Directive (EU) 2026/470).

Do SMEs have to comply with the CSDDD?

Not directly. SMEs may be asked for information as business partners of a company in scope; for business partners with fewer than 5,000 employees, that is only allowed when the information cannot reasonably be obtained by other means (Article 8(2a)(a)). Companies in scope must also consider targeted support for SME business partners (Article 10(2)(e)).

Does the CSDDD still require a climate transition plan?

No. Article 22, which required a transition plan for climate change mitigation, was deleted by Directive (EU) 2026/470. Companies that report under the Corporate Sustainability Reporting rules should check their reporting obligations separately.

Can a company be held liable for damages under the CSDDD?

The specific EU-wide liability regime was removed in 2026. Liability now follows from national law; where a company is held liable for damage caused by a failure to comply with the due diligence requirements, the injured party has a right to full compensation, without punitive or multiple damages (Article 29(2) CSDDD).

Primary sources

Directive (EU) 2024/1760 (CSDDD): Articles 1, 2, 5, 7, 8, 10 to 16, 22, 24, 25, 27, 29 and 37
Directive (EU) 2025/794 (“stop-the-clock”), Article 2
Directive (EU) 2026/470 (Omnibus I), Article 4