The EU lawmakers have reached a provisional agreement on the EU’s proposed corporate sustainability due diligence directive (CSDDD), outlining rules for companies requiring large businesses to assess and address adverse human rights and environmental impacts in their value chains.
The agreement follows the release of a proposed CSDDD directive by the European Commission in February 2022, and sets out obligations for companies to identify, assess, prevent, mitigate, and remedy impacts on people and planet in upstream and some downstream activities .
The new rules will apply to EU companies with more than 500 employees and over €150 million in global revenues and to companies with over 250 employees and €40 million revenues, and to non-EU companies with more than €300 million net revenue generated in the EU, beginning 3 years after the directive’s entry into force.
The new directive will require affected companies to integrate due diligence on impacts into their policies and risk management systems, including descriptions of their approach, processes and code of conduct.
With the agreement in place, the CSDDD will now require formal approval by the EU Council and Parliament before entering into force.
