Explainer
The Corporate Sustainability Due Diligence Directive was cut back sharply in 2026. Here is who is now in scope, what it requires, the new timetable and what it means for UK companies.
By Christopher Fagan, Managing Partner, PEF Consulting Partners
The Corporate Sustainability Due Diligence Directive is an EU law that requires the largest companies to identify, prevent and address adverse human rights and environmental impacts in their own operations, their subsidiaries and their chains of business partners. It was first adopted in 2024 and then amended by the EU’s Omnibus simplification package in 2026.
Directive (EU) 2026/470 was adopted on 24 February 2026, published in the Official Journal on 26 February and came into force on 18 March 2026. It narrowed the scope, pushed back the dates, deleted the duty to adopt a climate transition plan, removed the EU wide civil liability regime and capped fines.
| Item | Position after the 2026 amendment |
|---|---|
| EU companies in scope | More than 5,000 employees and more than €1.5 billion worldwide turnover |
| Non EU companies in scope | More than €1.5 billion turnover generated in the EU |
| Transposition into national law | By 26 July 2028 |
| Application | From 26 July 2029 for all companies in scope |
| Annual statement | For financial years starting on or after 1 January 2030 |
| Climate transition plan | Duty deleted from the CSDDD; CSRD reporting on any existing plan remains |
| Civil liability | The EU wide regime is removed and left to national law |
| Penalties | Capped at 3% of worldwide turnover |
| Ending business relationships | No longer a mandatory last resort |
Directly, only where a UK company generates more than €1.5 billion of turnover in the EU. Far more UK businesses will feel it indirectly: as suppliers to large EU companies, they will be asked for due diligence information, codes of conduct and contractual assurances on human rights and environmental practices.
CSRD is about reporting; the CSDDD is about doing the due diligence. Companies caught by both will report under CSRD on the due diligence the CSDDD requires. In the UK, the transparency statement under the Modern Slavery Act 2015 is the nearest equivalent, but it requires disclosure rather than due diligence itself.
Related reading: the CSRD timeline after the omnibus, the ESG due diligence checklist, ESG consultancy and compliance.
The Corporate Sustainability Due Diligence Directive, an EU law on human rights and environmental due diligence for the largest companies.
After the 2026 amendment, member states must transpose it by 26 July 2028 and it applies to companies in scope from 26 July 2029, with the annual statement for financial years from 1 January 2030.
Directly only to UK companies with more than €1.5 billion of turnover in the EU. Many more UK businesses will be affected as suppliers to EU companies that are in scope.
CSRD requires companies to report on sustainability matters. The CSDDD requires the largest companies to carry out due diligence on human rights and environmental impacts across their chains of business partners.
If EU customers have started asking for due diligence evidence, it is usually quicker to build on what you already do for modern slavery and ESG than to start from scratch, and we can help you do that.