How will the CSDDD be implemented in EU member states?

After several delays​ and alterations​, the Corporate Sustainability Due Diligence Directive (CSDDD) has finally passed in the European Parliament.

The directive aims to ensure that large companies do due diligence on their supply chains, ensuring that they are free of human rights abuses and environmental crimes. The food industry, with its myriad complex supply chains, will be heavily affected by the directive.

Now that the parameters for the CSDDD have been drawn up and the directive has been voted through, the next stage is implementation.

How will the CSDDD be implemented?

The European Council is expected to adopt the CSDDD before the upcoming EU elections, which will take place on 6-9 June. Twenty days after its adoption by the EU council, it will be published in the Official Journal, and from there, EU member states will have two years to put the directive into their national law, the European Coalition for Corporate Justice (ECCJ) told us.

CSDDD: The Basics

–        The CSDDD is a directive which ensures all companies operating in the EU with more than 1000 employees and €450m annual turnover must do due diligence in their supply chain to ensure they hold no environmental and human rights abuses.

–        Due to its focus on supply chains, it may also, less directly, affect the operations of smaller companies outside these parameters.

–        Failure to comply with the directive could result in fines of up to 5% of a company’s global turnover.

–        Companies of different sizes have different timescales to implement the CSDDD. Companies with 5000 employees and ​​€1500m annual turnover will have three years to implement changes, companies with 3000 employees and a €900m annual turnover will have a four-year process, and companies with 1000 employees and a €450m annual turnover will have five years. While the directive also affects companies from outside the EU, they must have €450m annual turnover within the EU to qualify.