European Council approves European Corporate Sustainability Due Diligence Directive

With the formal approval of the Corporate Sustainability Due Diligence Directive (CSDDD) by the Council of the European Union on 24 May 2024, the final step of the decision-making process has been taken. This means that the legislation has been adopted.

The aim of the EU's Corporate Sustainability Due Diligence Directive is to ensure that companies act in a sustainable, responsible fashion in global value chains. It also provides a unified EU-wide legal framework that gives companies legal certainty and a level playing field.

In important respects, the EU's Corporate Sustainability Due Diligence Directive has been closely modelled on Germany's Act on Corporate Due Diligence in Supply Chains and the UN Guiding Principles on Business and Human Rights. The CSDDD focuses on identifying and managing the potential and actual negative effects of corporate activities on human rights and the environment.

Next steps

Once signed by the President of the European Parliament and the President of the Council, the Directive will be promulgated in the Official Journal of the European Union. It will enter into force on the twentieth day after publication.

The EU member states then have two years to transpose the directive into national law.