Companies in scope
- 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.
Assessment frequency
- The frequency of the assessment of the effectiveness of the due diligence system proposed to be reduced to every 5 years instead of annually.
Indirect suppliers
- 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.
“Shield” for smaller 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.
Guidance schedule
- Companies will have access to guidance on due diligence earlier, in July 2026, to support preparedness with impact assessment and management.
Stakeholder definition
- Stakeholder engagement is limited to affected persons and their representatives. Only ‘relevant’ stakeholders need to be engaged in key due diligence steps.
Timeline
- The transposition of CSDDD into national law is delayed to July 2027, and the first wave companies that need to comply to July 2028.
Enforcement
- 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.