Provisional Agreement on the Corporate Sustainability Due Diligence Directive
Published 18 December 2023
Category: Impact and ESG
A provisional agreement on the Corporate Sustainability Due Diligence Directive (CSDDD) has been concluded between the Council and the European Parliament on 14 December 2023.
CSDDD has been subject to intense negotiations in the EU – as also described in our previous update. However, it seems that we are now close to see a final version. The deal from last week contains some highlights:
- The scope has been agreed upon, starting with large companies that have more than 500 employees and a net worldwide turnover of EUR 150 million (for non-EU companies it will apply if they have a EUR 150 million net turnover generated in the EU, three years from the entry into force of the directive).
- The CSDDD obligations for the companies cover the upstream business partners of the company and partially the downstream activities, such as distribution or recycling.
- The financial sector is, for now, not part of the scope of CSDDD. However, this may later change as the agreement suggests that there will be a review clause for possible future inclusion.
- As for civil liability, CSDDD establishes a period of five years to bring claims by those concerned by adverse impacts (including trade unions or civil society organisations).
- Penalties up to a maximum of 5 %, as a minimum, of the company’s net turnover.
- Compliance with CSDDD could be qualified as a criterion for the award of public contracts and concessions.
The next step is for the provisional agreement to be endorsed and formally adopted. Mazanti Transactions monitor the process closely. A press article on the agreement can be accessed here.
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