The Corporate Sustainability Due Diligence Directive (CSDDD) is the European Union law requiring the largest companies operating in the EU to identify, prevent and address adverse human rights and environmental impacts across their operations and value chains. Where CSRD mandates reporting, CSDDD mandates conduct: companies must run a due diligence process, not just disclose one.
Why It Matters for Manufacturers
After the EU raised the thresholds, few manufacturers are in CSDDD scope directly — the directive now targets only the very largest companies. The exposure for most manufacturers is indirect but concrete: in-scope companies must assess adverse impacts across their chain of activities, and that assessment arrives as information requests, contract clauses and audits from customers.
A manufacturer supplying an in-scope company should expect due diligence questions about labor practices, environmental management and site-level performance, with the answers flowing into someone else’s compliance obligation.
One deletion worth knowing: the standalone requirement to adopt a climate transition plan was removed from CSDDD, but companies reporting under CSRD still disclose transition plans under ESRS E1 — the obligation moved, it didn’t disappear.
U.S. and EU Applicability
CSDDD is EU law, and it reaches non-EU companies directly at scale. A U.S. company generating more than €1.5 billion in net turnover in the EU is in scope regardless of where it is incorporated. U.S. manufacturers below that line encounter the directive through customers’ due diligence programs. Because CSDDD is a directive, each member state transposes it into national law, so requirements can vary at the edges by country.
Current Status
Last updated: July 2026
- The Omnibus I Directive raised CSDDD scope thresholds to more than 5,000 employees and €1.5 billion in net worldwide turnover for EU companies, and more than €1.5 billion in EU net turnover for non-EU companies.
- Member states must transpose the directive by July 26, 2028. In-scope companies must comply by July 26, 2029, a single application date replacing the original staggered waves. Annual due diligence statements apply for financial years beginning on or after Jan. 1, 2030.
- The EU-harmonized civil liability regime was deleted; liability now rests on the national law of each member state. The standalone climate transition plan obligation was also removed.
- European Commission due diligence guidelines, intended to make compliance operational, are due by July 26, 2027.