The Council of the European Union formally adopted the Corporate Sustainability Due Diligence Directive (CSDDD), which was subsequently published in the Official Journal of the European Union on June 13, 2024.
The aim of the directive is to make large companies responsible for a more environmentally friendly and socially responsible economy. It applies to companies with more than 1,000 employees and a turnover of more than 450 million euros and covers a wide range of business activities. Companies that fall within the scope of the Directive must introduce or implement a risk-based system to monitor, prevent or remedy human rights or environmental harms identified in the Directive. The new legislation also requires these companies to ensure that human rights and environmental obligations are met throughout their chain of operations. If a breach of these obligations is identified, companies must take appropriate measures to remedy the negative impact of their own activities, those of their subsidiaries and those of their business partners in their chain of operations. Companies can be held liable for the damage caused and must pay full compensation. Companies subject to the directive must also adopt and implement a climate protection plan in accordance with the Paris Agreement on climate change.
The legislation was adopted after the Council approved the European Parliament’s position. Once signed by the President of the Council, the Directive will be published in the Official Journal of the EU and will enter into force on the twentieth day following its publication. The member states have two years to implement the regulations and administrative procedures to comply with this legal text. Depending on the size of the company, the directive will be applicable after a certain period of three to five years.
