The CSDDD establishes on the one hand a corporate due diligence duty and reporting obligations to ensure prevention of (potential) adverse impacts on human rights and the environment for in-scope companies on its operations, subsidiaries and supply chains. On the other hand, the CSDDD imposes the obligation to adopt and put into effect a transition plan for climate change mitigation which aims to ensure, through best efforts, that the business model and strategy of in-scope companies are compatible with the Paris Agreement.

Key highlights of the CSDDD:

  1. Scope:
    • Applies to both EU and non-EU companies meeting specific financial and operational thresholds.
  2. Main obligations:
    • Human rights and environmental due diligence: in-scope companies must integrate due diligence into policies, identify and mitigate adverse impacts, engage with stakeholders, and publicly communicate their (best) efforts.
    • Climate change transition plan: companies must align their business models with the Paris Agreement, setting time-bound targets and detailing decarbonization strategies.
  3. Compliance timeline:
    • 2026: EU Member States to transpose the CSDDD into national legislation.
    • 2027-2029: phased compliance deadlines based on in-scope company size and turnover.
  4. Control systems:
    • Administrative supervision, sanctions, and civil liability provisions ensure compliance, with penalties for non-compliance of the CSDDD by in-scope
    • Potential civil litigation is expected.

The cheat sheet on the CSDDD provides a concise overview, making it easier for in-scope companies to understand the CSDDD scope and requirements. Feel free to contact our experts for any specific queries or tailored advice.

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Cheat Sheet on the CSDDD