Navigating supply chain due diligence after the Omnibus I Directive (Directive (EU) 2026/470)
EU Corporate Sustainability Due Diligence Directive (CSDDD)
Navigating supply chain due diligence after the Omnibus I Directive (Directive (EU) 2026/470)
EU Corporate Sustainability Due Diligence Directive (CSDDD)
Introduction
The Corporate Sustainability Due Diligence Directive is the EU’s major instrument for the implementation of a cross-sector due diligence framework. It requires in-scope companies to identify, prevent, and mitigate adverse human rights and environmental impacts. These obligations cover a company’s own operations, its subsidiaries, and its business partners.
The Directive was adopted in 2024 and entered into force on July 25, 2024. It has since been substantially amended through the Omnibus I Directive, which entered into force on March 18, 2026.
What Omnibus I changed
The Omnibus I amendments significantly scaled back the original Directive. The key changes are:
Higher thresholds: CSDDD now applies only to EU companies with more than 5,000 employees and €1.5 billion net worldwide turnover. Non-EU companies exceeding €1.5 billion in EU net turnover are also in scope.
Narrower due diligence focus: companies must focus their due diligence on areas where adverse impacts are most likely to occur. Where impacts are equally likely across several areas, companies may prioritise direct business partners.
Climate transition plans deleted: The Omnibus I amendments remove the CSDDD obligation to adopt and implement a climate transition plan. Separate sustainability reporting requirements may still require transition plan-related disclosures where applicable.
EU-level harmonised liability regime removed: the original EU-wide harmonised civil liability regime has been deleted. Civil liability will instead be determined by national law. If a company is found liable under that national law for damage caused by a failure to comply with CSDDD due diligence requirements, affected persons must have a right to full compensation.
Fines capped: maximum penalties cannot exceed 3% of net worldwide turnover, down from the original minimum of 5%.
No mandatory termination, but suspension mechanism remains: the obligation to terminate a business relationship as a last resort has been removed. Companies may still need to avoid entering into new relationships or extending existing ones where appropriate. Suspension of an existing relationship may also be required in certain circumstances, subject to applicable legal conditions.
Postponed timeline: transposition deadline extended to July 26, 2028. Application from July 26, 2029 for all in-scope companies, with no phasing.
What remains unchanged
Despite the Omnibus I scaling-back, the substance of CSDDD remains significant. It remains the EU’s cross-sector due diligence framework for large companies. It requires in-scope companies to address adverse human rights and environmental impacts across their own operations, subsidiaries and, where related to their chains of activities, business partners. The Directive now frames this as a more risk-based and proportionate due diligence system. In-scope companies should:
Carry out a scoping exercise, based on reasonably available information, to identify the general areas where adverse impacts are most likely to occur and to be most severe.
Conduct targeted assessments in those areas.
Prioritize and take appropriate measures to prevent, mitigate, bring to an end or minimize adverse impacts.
Maintain a complaints and notification mechanism.
Engage with relevant stakeholders at specified stages of the due diligence process.
Monitor the adequacy and effectiveness of their due diligence measures over time.
Publicly report on their due diligence framework and actions, where applicable.
Transposition status
No Member State has yet begun transposing the CSDDD. The transposition deadline is July 26, 2028, with application from July 26, 2029. Companies should monitor national transposition for potential variations.
Timeline
July 25, 2024: CSDDD entered into force.
April 14, 2025: Stop-the-Clock Directive adopted, postponing the original transposition deadline by one year.
March 18, 2026: Omnibus I Directive entered into force, further amending CSDDD scope, obligations, and timeline.
July 26, 2028: Deadline for Member States to transpose the amended CSDDD.
July 26, 2029: CSDDD obligations apply for all in-scope companies.
January 1, 2030: In-scope companies must publish an annual statement on due diligence matters.
How we can help
Our global Sustainability and ESG team advises on CSDDD readiness, including the design and implementation of due diligence programmes, supply chain risk mapping, complaints mechanisms, and stakeholder engagement processes. We also support clients in establishing robust compliance systems, investigating alleged violations, and managing resulting crisis situations. In addition, we assist companies in assessing whether they fall within scope under the revised thresholds and in preparing for differences arising from national transposition across jurisdictions.
Key contacts
© Eversheds Sutherland. All rights reserved. Eversheds Sutherland is a global provider of legal and other services operating through various separate and distinct legal entities. Eversheds Sutherland is the name and brand under which the members of Eversheds Sutherland Limited (Eversheds Sutherland (International) LLP and Eversheds Sutherland (US) LLP) and their respective controlled, managed and affiliated firms and the members of Eversheds Sutherland (Europe) Limited (each an "Eversheds Sutherland Entity" and together the "Eversheds Sutherland Entities") provide legal or other services to clients around the world. Eversheds Sutherland Entities are constituted and regulated in accordance with relevant local regulatory and legal requirements and operate in accordance with their locally registered names. The use of the name Eversheds Sutherland, is for description purposes only and does not imply that the Eversheds Sutherland Entities are in a partnership or are part of a global LLP. The responsibility for the provision of services to the client is defined in the terms of engagement between the instructed firm and the client.
Connect with us
