The European Union’s Corporate Sustainability Due Diligence Directive (CSDDD), which came into force on July 25, 2024, was initially lauded as a significant advancement in corporate accountability. It mandated large companies to identify, prevent, and address adverse human rights and environmental impacts throughout their value chains. The directive also introduced civil liability provisions and empowered supervisory authorities to impose fines up to five percent of global turnover.
However, by February 2026, the European Commission introduced the Omnibus I package, which substantially revised the CSDDD. These amendments raised the employee threshold from 1,000 to 5,000, limited due diligence obligations to direct (tier 1) suppliers, removed mandatory climate transition plans, and postponed the compliance deadline to July 2029. The Commission presented these changes as simplifications, but critics view them as a significant dilution of the directive’s original intent.
This pattern of initial ambition followed by retrenchment mirrors the experience of France’s Duty of Vigilance Law (Loi de Vigilance), enacted in 2017. The French law requires companies with over 5,000 employees in France or 10,000 worldwide to publish a vigilance plan that maps risks across subsidiaries and supply chains, includes mitigation measures, and establishes a whistleblowing mechanism. Non-compliance exposes companies to civil liability.
Despite its pioneering status, the Loi de Vigilance has faced significant challenges. Determining which companies fall under its scope has proven difficult, with estimates ranging from 200 to 250 companies. The absence of an implementing decree has left obligations vague, leading to inconsistent judicial interpretations. Enforcement relies heavily on non-governmental organizations, resulting in protracted litigation processes.
The United Kingdom, having exited the EU, has opted not to implement similar comprehensive due diligence legislation. This divergence creates a fragmented regulatory landscape for multinational corporations operating across these jurisdictions. Companies must navigate varying requirements, potentially leading to compliance challenges and increased legal uncertainty.
The trajectory of the CSDDD, from its ambitious inception to the recent Omnibus I revisions, raises concerns about the EU’s commitment to robust corporate due diligence. The French experience serves as a cautionary tale, highlighting the difficulties in enforcing such laws without clear guidelines and strong enforcement mechanisms. As the EU moves forward, it must address these challenges to ensure that corporate accountability and sustainability remain at the forefront of its agenda.