Corporate Sustainability Due Diligence Directive is Officially Published

Fani Xylouri
Fani Xylouri
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The CSDDD – or as also called CS3D - has been published in the Official Journal of the European Union, marking a major advancement in promoting sustainable business practices across Europe.

This directive aims to enhance corporate sustainability by driving sustainable development through the identification, prioritisation, prevention, mitigation, and remediation of actual or potential adverse social and environmental impacts within companies' operations, including their subsidiaries and business partners. This directive is a fundamental component of the EU's comprehensive strategy to promote an ethical and sustainable business environment.


Key Dates and Implementation Timeline

25 July 2024: The CSDDD will enter into force. 

By 26 July 2026: EU member states must transpose the directive into their national laws. During this period, the European Commission will also assess whether to extend due diligence requirements to the downstream part of the value chain for financial institutions. 

The directive will be implemented through a phased-in approach based on a company’s size and turnover, ensuring a gradual transition for EU and Non-EU businesses (or ultimate parent companies of corporate groups).


Application Phases

26 July 2027: Initial Scope

  • EU Companies: with over 5,000 employees and a net worldwide turnover exceeding €1,500 million.
  • Non-EU Companies: with a net turnover of more than €1,500 million in the EU.

26 July 2028: Expanded Scope

  • EU Companies: with over 3,000 employees and a worldwide turnover exceeding €900 million. 
  • Non-EU Companies: with a net turnover of more than €900 million in the EU.

26 July 2029: Final Scope

  • EU Companies: with over 1,000 employees and a worldwide turnover exceeding €450 million. 
  • Non-EU companies: with a net turnover of more than €450 million in the EU.


Significance of the CSDDD

The introduction of CSDDD is an important development for the EU in fostering corporate sustainability by ensuring companies are accountable for their environmental and social impacts. This directive enhances transparency through mandatory reporting on due diligence efforts, offering clarity to consumers, investors, and stakeholders alike. It also ensures that Non-EU companies operating significantly within the EU market adhere to the same standards as EU-based firms.

As businesses begin to implement this directive, it will catalyse a shift towards more responsible and sustainable practices within the corporate and financial world. With time it will set an EU benchmark as a supply chain legislative piece together with the several existing jurisdictional laws. Consequently, since its implementation, it will play a vital role for companies that are not directly in its scope to anticipate and prepare for these changes proactively. In summary, this directive will pose challenges operating in various markets with complex value chains and multiple stakeholder groups.


How can Grant Thornton Luxembourg help you?

Our team of experts in Sustainability and ESG can assist you to:

  • Align your strategy and risk management following ESG considerations. 
  • Review current practices, identify gaps, and achieve compliance with CSDDD requirements. 
  • Raise awareness of the management body and employees on ESG matters. 


If you wish to understand how you could best implement ESG practices in your organisation, please contact Fani Xylouri, our Head of Sustainability & ESG Services at Grant Thornton Luxembourg,