No change in the proposed number of companies. Estimated to impact over 6,000 large firms with more than 1,000 employees and over €450 million in turnover in the EU.
Companies in scope
The frequency of the assessment of the effectiveness of the due diligence system proposed to be reduced to every 5 years instead of annually.
Assessment frequency
The requirement to scrutinize all indirect suppliers has been removed unless there is a clear indication of harm. Instead, companies can focus on their own operations, subsidiaries, and direct suppliers.
Indirect suppliers
Direct business partners with < 500 employees can’t be asked to provide information on sustainability performance beyond voluntary reporting standards, to be adopted by the EU.
“Shield” for smaller suppliers
Stakeholder engagement is limited to affected persons and their representatives. Only ‘relevant’ stakeholders need to be engaged in key due diligence steps.
Stakeholder definition
The transposition of CSDDD into national law is delayed to July 2027, and the first wave companies that need to comply to July 2028.
Timeline
To avoid a fragmented regulatory landscape, EU countries will not be allowed to go beyond the Directive on certain aspects of due diligence. However, the original harmonization of national liability regimes in terms of penalties has been dropped.
Enforcement
Companies will have access to guidance on due diligence earlier, in July 2026, to support preparedness with impact assessment and management.
Guidance schedule