The landmark regulation will require firms to mitigate their negative impact on human rights and the environment

The European Parliament passed the Corporate Sustainability Due Diligence Directive (CSDDD). This means that the new regulation passed all the EU legislative phases. It is expected to be signed into law by the EU Council this summer, with EU member states given two years to transpose the rules into national laws.

To remain in compliance, companies will need to conduct human rights and environmental due diligence on their own operations, their subsidiaries and their supply chain. This applies to impacts that occur within or without the EU.

Enforcement is scheduled to begin in 2027 for companies with over 5,000 employees and annual turnover of more than €1.5 billion, in 2028 for companies with more than 3,000 employees and €900 million in turnover, and in 2029 for companies with more than 1,000 employees and €450 million in turnover.