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The Corporate Sustainability Due Diligence Directive (CSDDD) requires large companies to conduct human-rights and environmental due diligence throughout their value chain. Who is in scope, what duties apply, and how the Omnibus package changes things – explained concisely.
EU directive on mandatory human-rights and environmental due diligence throughout the entire value chain of large companies.
Very large EU and non-EU companies above high employee and turnover thresholds; the EU Omnibus package adjusts these thresholds.
Risk-based 6-step process: integrate into policies; identify and assess; prevent and mitigate; remediate; monitor; communicate.
Obligation to adopt a Paris-aligned climate transition plan as a standalone requirement alongside the due-diligence process.
The Corporate Sustainability Due Diligence Directive (CSDDD) is the EU directive that obliges large companies to conduct risk-based due diligence on adverse human-rights and environmental impacts – both in their own operations and throughout their entire chain of activities (upstream and downstream business partners). It therefore goes well beyond purely financial or reporting obligations and creates operational action requirements.
The CSDDD targets very large companies that exceed certain thresholds for headcount and worldwide net turnover. The EU Omnibus package is expected to raise these thresholds upward, thereby narrowing the direct scope.
The CSDDD requires a risk-based due-diligence process embedded in corporate policy and strategy. Companies must proceed systematically along their entire chain of activities.
As a standalone obligation – separate from the general due-diligence process – companies in scope must adopt and implement a climate transition plan compatible with the goal of limiting global warming in line with the Paris Agreement. The plan must contain concrete targets, measures and resources, and must be updated regularly. This requirement persists under the Omnibus package.
The CSDDD provides for national supervisory authorities that can verify compliance and impose sanctions, including fines. In addition, civil liability is established: injured parties may bring claims against companies in court where due-diligence obligations were breached and damage resulted. The Omnibus package limits parts of this liability regime and provides for relief on sanctions.
The CSDDD does not stand alone but complements other sustainability regulatory frameworks.
The CSRD requires companies to report on sustainability impacts (under ESRS). The CSDDD creates operational action obligations: companies must actually prevent, mitigate and remedy adverse impacts – not merely report on them.
The LkSG already applies and covers companies with 1,000 or more employees in Germany. The CSDDD applies EU-wide, covers the entire value chain, includes stronger environmental obligations and establishes civil liability. Once the CSDDD is transposed into national law, the LkSG is expected to be superseded or adapted.
Very large companies – EU companies and non-EU companies with significant EU turnover – above the thresholds for employees and net turnover. The Omnibus package raises these thresholds, narrowing the direct scope. Smaller suppliers may be indirectly affected if large customers pass on due-diligence obligations contractually.
A binding plan describing how the company aligns its business strategy and activities with the goal of limiting global warming to 1.5 degrees in accordance with the Paris Agreement. It must contain concrete targets, measures, resources and governance mechanisms, and must be revised regularly.
The Omnibus package proposes higher thresholds (fewer companies directly in scope), postponed deadlines, a limitation of the civil liability regime and relief on sanctions. The core obligations – the due-diligence process and the climate transition plan – remain in place.
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