The EU’s Corporate Sustainability Due Diligence Directive (CSDDD) has officially taken effect, marking a stride in sustainable business practices.
According to Environmental Finance, published in the Official Journal of the EU, the directive mandates member states to incorporate its provisions into their national laws by 26 July 2026.
Targeting the continent’s largest enterprises, the CSDDD will come into force for EU-based companies boasting over 1,000 employees and a global turnover exceeding €450m. From July 2027, these companies must not only report on the sustainability credentials of their supply chains but also actively implement plans to transition towards lower carbon emissions.
The directive’s reach extends beyond EU borders, affecting non-EU entities with a net turnover of more than €450m within the EU. The full implementation for all specified entities will be phased over two years post-initial application.
The CSDDD is a critical component of the EU’s broader environmental and corporate governance strategy, aiming to enhance transparency and foster a more sustainable economic framework within the bloc.
By enforcing these regulations, the EU seeks to ensure that large corporations play a pivotal role in combating climate change and promoting sustainability through their operational and financial decisions.
As the directive rolls out, companies will need to adapt to these new regulations, which could involve significant changes to their supply chain management and corporate governance strategies. This initiative not only underscores the EU’s commitment to environmental stewardship but also sets a precedent for regulatory expectations in the global market.
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