This blog was originally posted on 8th July, 2024. Further regulatory developments may have occurred after publication. To keep up-to-date with the latest compliance news, sign up to our newsletter.

AUTHORED BY MICHELLE WALSH, SENIOR LEGAL TEAM LEADER, COMPLIANCE & RISKS

Introduction

The final text of the Corporate Sustainability Due Diligence Directive (CSDDD) was published in the Official Journal of the European Union on July 5th. 

Although the final text has received a lot of criticism for being a watered-down version of earlier drafts, it is still significant in terms of its’ impact on larger companies that place their products on the EU market. 

Implications for Companies

It will be introduced on a staged basis for the following companies (depending on their employee size and annual turnover).

Date of Application: 26 July 2027

• For EU-based companies with > 5000 employees and net worldwide turnover of > EUR 1.5 billion in the last financial year (including parent companies) (except Article 16) for financial years starting on or after 1 January 2028
• For non-EU companies that generated a net turnover of > EUR 1.5 billion in the Union in the last financial year for financial years starting on or after 1 January 2028

Date of Application: 26 July 2028

• For EU-based companies with > 3000 employees and net worldwide turnover >EUR €900 million (including parent companies) in the last financial year (except Article 16) for financial years starting on or after 1 January 2029
• For non-EU companies that generated a net turnover > EUR €900 million in the Union n the last financial year for financial years starting on or after 1 January 2029

Date of Application: 26 July 2029

• For all companies > 1000 employees and turnover >€450 million in previous financial year (including parent companies) (except Article 16) for financial years starting on or after 1 January 2029

These companies must conduct a risk-based human rights and environmental due diligence (as laid out in Articles 7 to 16) that is integrated into all their relevant policies and risk management systems and put in place a due diligence policy. 

Companies must publish an annual statement on their website on the matters covered by the Directive. From 1 January 2029, companies must also provide a statement to the relevant collection body for making this information accessible to the European single access point (ESAP).

Companies that are located outside of the EU but place their products on the EU market must appoint an authorized representative that is established or domiciled in one of the Member States where it operates in accordance with Article 23 to be able to communicate with supervisory authorities about due diligence compliance on their behalf.

What’s Next for CSDDD?

The CSDDD Directive 2024/1760 will enter into force on 25 July 2024 and will need to be transposed in the Member States by 26 July 2026. 

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