The Corporate Sustainability Due Diligence Directive

As part of the EU’s broader sustainability agenda, the CSDDD mandates that large organisations implement risk-based due diligence processes. These processes are designed to identify, prevent and mitigate negative impacts within both direct operations and the broader value chain, including suppliers and other partners. In essence, this means moving from ad hoc or fragmented compliance measures to a more strategic, structured and fully integrated approach to environmental and human rights obligations.

Crucially, the directive applies to a broad range of companies:

Big Swiss multinationals with substantial EU activities will also find themselves in scope. Given the sizeable investments, resources and governance structures likely to be required, many companies are realising that it is far more efficient to start gearing up now rather than waiting until the final deadline. 

Responding to the CSDDD can be daunting—particularly for businesses that must overhaul or significantly expand existing sustainability processes. But companies that start soon have the advantage of integrating their CSDDD efforts alongside other sustainability initiatives, preventing duplication of work. Early adopters can also streamline capital and resource allocation, embed more effective climate transition plans and establish mechanisms for continuous monitoring and reporting.

The Omnibus legislative initiative aims to reduce the sustainability reporting burden for EU companies through the harmonisation of key EU legislation (CSRD, EU Taxonomy, CSDDD, etc.). The proposal is expected to be published soon, followed by a period of consultation and approval. Until then, the current EU legislative framework remains in place. It is expected that the Omnibus will address streamlining measures, helping companies find simplifications and synergies among sustainability regulatory requirements — a topic we at PwC continuously address. PwC will publish an update of this article as soon as the impacts of the omnibus on the CSDDD is clear.

Although most businesses have until 2027 (or later) to fulfil their CSDDD obligations, the real takeaway is that significant time and investment are needed to set up due diligence and reporting systems. And while this may present organisational challenges, the directive also creates a unique opportunity to stand out as a sustainability pioneer, reduce long-term risk and foster greater trust among investors, customers and the public.

If you’re looking for a more detailed roadmap—or simply want to understand the scope of these changes—download our full paper to learn how best to prepare. Beyond exploring the intricacies of the directive itself, we provide practical guidance on performing a regulatory gap analysis, aligning with other sustainability frameworks and managing stakeholder engagement across your value chain.