The CSDDD and the EU's Green Ambitions

Photo by Noah Buscher on Unsplash 

Background

The EU’s Corporate Sustainability Due Diligence Directive (CSDDD) officially came into force in July 2024. A regulation that strengthens corporate accountability on human rights and environmental impacts, it applies to both EU and non-EU companies. It is part of the EU’s sustainability agenda, which includes the Corporate Sustainability Reporting Directive (CSRD).

In 2025, the European Commission introduced amendments to the CSDDD. These amendments cover: 

1. Simplified reporting requirements to reduce overlap.

2. Reducing the trickle-down effect on smaller suppliers by focusing responsibility on larger firms. 

3. Competitiveness safeguards to balance sustainability with economic growth.

4. Harmonisation between reporting and due diligence directives for a more coherent regulatory landscape. 

5. New timelines to give businesses more time to adapt.

The CSDDD is significant for several reasons. It puts sustainability at the heart of corporate governance. Companies must identify, prevent, and mitigate adverse impacts on human rights and the environment across their operations and supply chains. Similar to the GDPR, the CSDDD also sets a de facto global standard for responsible business conduct. Additionally, the directive enhances transparency and reduces reputational risks by its requirements for due diligence. This makes sustainable firms more attractive to investors. Lastly, it ensures corporate practices align with the EU's climate neutrality and biodiversity protection goals. 

Why It Matters

The CSDDD represents a shift from voluntary corporate responsibility to binding legal obligations. No longer a peripheral issue, sustainability is becoming a core business requirement for the EU. The amendments substitute a strict chain-of-activities model for a more flexible approach. The amendments show the EU’s pragmatism: maintaining ambitious sustainability goals while easing compliance to foster competitiveness.