After extensive negotiations and a near-failure to be passed, the European Council Committee of Permanent Representatives (COREPER) and the European Parliament Committee on Legal Affairs (JURI) passed the Corporate Sustainability Due Diligence Directive (CSDDD) – but the scope of the law has been significantly slashed.

What is left of the CSDDD?

The CSDDD was originally agreed upon in December 2023 and aims to “stop businesses from looking away from very real human misery and destruction,” as declared by Lara Wolters, Dutch MEP, and lead negotiator via The Guardian. However, complications arose when key member states started turning their back on the directive, reaching a peak of frustration when a vote in the COREPER failed back in February.

The Belgian government, holding the current rotating presidency of the EU Council, re-entered negotiations and managed to secure a new compromise for the law – at a significant cost.

So, what is left of the law?

• The updated agreement now covers companies with over 1,000 employees, increased from the initial 500, and with a net turnover of €450 million, three times higher than previously agreed upon. This excludes as many as 70% of the companies originally meant to be covered.
• The scope of activities under due diligence obligations has been further reduced. It does this by omitting responsibilities related to product disposal, dismantling, recycling, composting, and landfilling. As a result, companies are not required to identify or address potential risks and damages associated with these end-stage activities.[1]
• The idea to give bonuses to directors for leading their companies to be more environmentally friendly was taken out. This means there’s one less way to push for quicker action towards sustainability, even though companies still have to plan to do better for the climate.[2]