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Revised Corporate Sustainability Due Diligence Directive is approved

The Corporate Sustainability Due Diligence Directive (CSDDD) received backing from the European Council in a vote on 15 March. The vote concludes weeks of negotiations and revisions to the text of the CSDDD after its failure to secure the Council's approval at the end of February.

Compromises have been made on the scope of the CSDDD in order to assuage the concerns of a faction of member states led by Germany and Italy, for whom the reach of the originally drafted CSDDD was too broad and burdensome upon businesses. A key difference in the approved text is a higher threshold for which companies will be subject to the CSDDD's requirements: 1,000 employees and a net turnover of €450m compared to the previously envisaged 500 employees with a revenue of €150m. Other changes include a narrower definition of supply chains and a phased introduction according to company size. Whilst some critics have voiced disappointment in the concessions made, the CSDDD in its final form is still a step towards promoting transparency and tackling issues such as human rights abuses and environmental harms in supply chains 

The next step is for the European Parliament to vote on the CSDDD before it becomes law, with most MEPs expected to vote in favour.


corporate, sustainability and esg