CSDDD Supply Chain Accountability Hub
CSDDD is not just another EU disclosure law — it rewrites the procurement standards and trading conditions that global manufacturers have to meet. GRI tracks the due diligence obligations placed on large EU and non-EU companies, and breaks down what they mean in practice for Japanese manufacturers and upstream suppliers, along with the concrete steps companies should be taking now.
Feature Type: Instrument-centric — this Feature covers the CSDDD directive itself, its internal components, and the regulations most closely related to it.
Confirmed
Companies with 5,000+ employees and turnover over €1.5B (non-EU companies: net turnover in the EU over €1.5B)
26 Jul 2029 (full application begins)
Due diligence → Risk management → Supplier engagement
Interaction with CSRD and LkSG (unresolved details)
Why This Matters
Three Things to Do Now
- 1.Identify ESG and human rights risk across the supply chain
Map the supply network from Tier 1 down to upstream mines and farms, and screen for high-risk areas such as child labor and environmental pollution.
- 2.Revisit procurement standards and supplier codes of conduct
Review your procurement terms in preparation for due diligence clauses and pledges that EU buyers are likely to request.
- 3.Build ESG data collection and tracking infrastructure
Put in place a digital system that can collect and visualize Scope 1, 2 and 3 emissions data and human rights audit logs from suppliers.
Important Deadlines
Regulatory Landscape
Internal Components (within the CSDDD directive)
EU CSDDD Human Rights and Environmental Due Diligence Implementation Process and Value Chain Engagement Requirements
This card focuses on the concrete implementation requirements for the human rights and environmental due diligence (DD) process at the core of the EU Corporate Sustainability Due Diligence Directive (CSDDD: Directive (EU) 2024/1760). CSDDD codifies the six-step due diligence process defined in the OECD Guidelines for Responsible Business Conduct as a binding legal obligation. Covered companies must identify, prioritize, and address adverse human rights impacts (such as child labor, unfair labor practices, and unpaid wages) and environmental harms (such as unlawful discharge, release of hazardous substances, and deforestation) across their entire chain of activities — not only their own operations, but also subsidiaries and both upstream (raw material sourcing and manufacturing) and downstream (transport and storage) activities. Companies are also required to establish grievance mechanisms. In identifying and assessing adverse impacts, they may make use of independent reports and industry or multi-stakeholder initiatives, among other resources.
EU CSDDD: Removal of the Climate Transition Plan Obligation and Its Separation from CSRD Disclosure
This card explains how the climate transition plan obligation under the EU Corporate Sustainability Due Diligence Directive (CSDDD) changed as a result of the 2026 Omnibus reform. Article 22 of the original CSDDD (Directive (EU) 2024/1760) required in-scope companies to adopt and implement a transition plan aligned with the Paris Agreement's 1.5°C goal and the EU's 2050 climate neutrality target, including five-year interim Scope 1, 2, and 3 emissions-reduction targets and board-level oversight. The Omnibus I reform (Directive (EU) 2026/470), in force since 18 March 2026, deleted this obligation from the CSDDD entirely. In-scope companies are no longer legally required to adopt or implement a transition plan under the CSDDD. This does not mean all climate-related disclosure obligations have disappeared, however. Under the CSRD (Corporate Sustainability Reporting Directive), companies that already have a transition plan must still disclose it under the ESRS E1 standard. What the CSDDD required was substantive adoption and implementation; what the CSRD requires is disclosure of a plan if one exists. The two are legally distinct.
EU CSDDD: Administrative Penalties (Capped at 3%) and Civil Liability Under National Law
This card covers how administrative enforcement (penalties) and civil liability operate under the EU Corporate Sustainability Due Diligence Directive (CSDDD). Under the original Directive (in force from 2024), Member State supervisory authorities could impose penalties of at least 5% of a company's worldwide net turnover, and the Directive established an EU-harmonised civil liability regime under which victims of non-compliance — or their representatives, including NGOs and trade unions — could bring damages claims directly before national courts. The Omnibus I reform (Directive (EU) 2026/470), in force since 18 March 2026, changed both of these mechanisms significantly. First, the penalty ceiling was changed from a minimum floor of 5% to a maximum cap of 3% of worldwide net turnover. Second, the EU-harmonised civil liability regime was removed altogether: claims for damages arising from due diligence failures are now governed exclusively by the national law of each Member State. There is no unified EU standard, and the EU-level right for NGOs and trade unions to bring representative claims no longer exists.
Related Regulations
EUDR Due Diligence Statement (DDS) Submission Process and Value Chain Responsibility Allocation
This card focuses on the practical process of preparing and submitting a Due Diligence Statement (DDS) under the EU Deforestation Regulation (EUDR: Regulation (EU) 2023/1115), and on how responsibility is allocated among operators across the value chain. Under EUDR, operators placing covered commodities (cattle, cocoa, coffee, palm oil, rubber, soy, and wood) and their derived products on the EU market, or exporting them from the EU, are legally required to submit and register a DDS through the European Commission's information system (TRACES NT / the EUDR Information System) before trading or shipping the goods. By submitting a DDS, an operator ultimately takes on legal responsibility for confirming that the relevant product in its value chain is deforestation-free and was produced in compliance with the laws of the country of production. The regulation sets out concrete compliance requirements, including a system for downstream operators and SMEs to reference an upstream DDS reference number under simplified arrangements, and a five-year document retention obligation.
EU Corporate Sustainability Reporting Directive (CSRD)
The EU Corporate Sustainability Reporting Directive (CSRD) is the foundational EU law governing sustainability reporting, substantially strengthening the earlier Non-Financial Reporting Directive (NFRD). It progressively mandates ESG disclosures based on a double materiality assessment. For non-EU companies, the European Parliament's press release (December 16, 2025) covers companies with net turnover in the EU above €450 million and subsidiaries or branches with turnover above €200 million. Directive (EU) 2026/470 (Omnibus I) was published in the Official Journal on February 26, 2026 and entered into force on March 18, 2026. The press release sets the scope of sustainability reporting at EU companies with more than 1,000 employees on average and net annual turnover above €450 million. The first wave of reporting has already been applying since FY2024 results (reported in 2025), and its effects are spreading through the value chain as companies further down the supply chain face growing requests for data.
EU Battery Regulation — Battery Supply Chain Due Diligence Obligations
Under Chapter VII of the EU Battery Regulation (Regulation (EU) 2023/1542), economic operators placing batteries on the EU market with an annual net turnover exceeding €40 million are required to establish, operate, and obtain third-party verification of a human rights and environmental due diligence policy covering the sourcing of key raw materials and chemical compounds such as cobalt, natural graphite, lithium, and nickel.
Germany's Supply Chain Due Diligence Act (LkSG)
This German national law requires companies to establish a risk management system, publish annual reports, and set up a grievance mechanism to prevent and remedy human rights violations, such as child and forced labour, and environmental risks, such as mercury pollution or breaches of the Stockholm Convention on POPs, both within their own operations and among their direct and indirect suppliers. With the CSDDD's scope significantly narrowed by the Omnibus I reform (in force since March 2026), LkSG is no longer best understood as a law being "absorbed and scaled back" into CSDDD. Instead, it is expected to remain an important standalone law in Germany with a broad practical reach, continuing to impose human rights and environmental due diligence obligations on mid-sized companies that now fall outside the CSDDD's scope.
Regulatory Architecture
Only relationships that can be confirmed from existing data are shown here. Pairs whose relationship is not yet settled are left unlabeled rather than guessed at.
Confirmed Relationships
Germany's Supply Chain Due Diligence Act (LkSG)
Germany's LkSG entered into force ahead of the EU-wide CSDDD and is recognized as a national precursor to it, having already established supply chain due diligence obligations at the national level. Following the March 2026 Omnibus amendment, which reduced the number of companies in CSDDD's scope, more companies now remain subject only to LkSG rather than to CSDDD directly.
Related, but Not Yet Labeled
A connection exists in the underlying text for the pairs below, but because the legal relationship has not been fully worked out, none of the four relationship types (Precedes / Implements / Overlaps / Sector-specific parallel) has been assigned.
Industry Impact
Battery & EV
Human rights audits spanning raw material extraction through manufacturing of vehicle batteries, and management of forced-labor risk in lithium and cobalt sourcing.
Relevant Regulation: EU Corporate Sustainability Due Diligence Directive (CSDDD)
Chemicals & Materials
Remediation of upstream environmental pollution and human rights management, plus audits of processes involving hazardous chemicals.
Relevant Regulation: EU Corporate Sustainability Due Diligence Directive (CSDDD)
Electronics
Tracking labor conditions and conflict minerals across globally distributed suppliers of semiconductors and electronic components.
Relevant Regulation: EU Corporate Sustainability Due Diligence Directive (CSDDD)
Automotive
Mapping the supply network across tens of thousands of auto parts, with due diligence reaching extraction sites in places like Chile and the DRC.
Relevant Regulation: EU Corporate Sustainability Due Diligence Directive (CSDDD)
Semiconductors
Auditing human rights certifications and cleanroom compliance across globally dispersed fabs and material vendors.
Relevant Regulation: EU Corporate Sustainability Due Diligence Directive (CSDDD)
Apparel
Rigorous monitoring for forced and child labor at cotton farms and dye houses, and for chemical wastewater discharge.
Relevant Regulation: EU Corporate Sustainability Due Diligence Directive (CSDDD)
Corporate & Supply Chain Implications
Click or tap each node to see how CSDDD ripples down into Japanese manufacturing and raw-material networks — the role each actor plays and the concrete business impact involved.
Click a node above to view its details.
Regulatory Status / Uncertainty
Status (Legal Existence & Force)
"Confirmed" means the regulatory instrument itself is legally established and in force. It does not mean every obligation currently applies to every company. Applicability, phase-in, and specific start dates are shown separately below, under Timeline.
Timeline
CSDDD formally enters into force
Omnibus I reform enters into force: scope unified to companies with 5,000+ employees and turnover over €1.5B, the climate transition plan obligation is deleted, the EU-harmonised civil liability regime is removed, and the penalty cap is changed to 3%
Deadline for member states to transpose into national law
CSDDD applies to all in-scope companies (single application date)
Article 16 reporting obligation takes effect
Uncertainty
- The climate transition plan requirement is also connected to CSRD's climate-related disclosure standard (ESRS E1), but the precise legal relationship between the two has not yet been resolved within this Feature.
- Germany's LkSG is treated here as a national law that preceded CSDDD, but how the two laws interact in practice during any period of overlap depends on national implementing rules and further European Commission guidance that has not yet been fully confirmed.
Latest Developments
According to the European Commission's page on the Corporate Sustainability Due Diligence Directive (CSDDD, Directive (EU) 2024/1760), Directive (EU) 2026/470, which amends the CSDDD, was published in the Official Journal on 26 February 2026. Its date of entry into force is 18 March 2026. The page describes the scope as EU companies meeting the thresholds of 5,000 employees and EUR 1.5 billion net worldwide turnover, and non-EU companies meeting the threshold of EUR 1.5 billion net turnover in the EU. Member States must adopt and publish national transposition measures by 26 July 2028 and apply them from 26 July 2029; the reporting measures under Article 16 apply for financial years starting on or after 1 January 2030. The page states that the main guidelines are due by 26 July 2027 and additional ones by 26 July 2028.
On 16 December 2025, the European Parliament approved, in plenary, a provisional agreement between MEPs and EU governments on updated sustainability reporting and due diligence rules for companies (the CSRD and the CSDDD). The text was adopted with 428 votes in favour, 218 against and 17 abstentions. According to the European Parliament press release, sustainability reporting would apply only to EU companies with more than 1,000 employees on average and a net annual turnover above €450 million. Due diligence obligations would apply to large EU companies with more than 5,000 employees and a net annual turnover above €1.5 billion. The due diligence directive would apply from 26 July 2029, and fines would be capped at 3% of net worldwide turnover. The final text still has to be formally approved by the Council, and the directive will enter into force twenty days after its publication in the Official Journal.