Compromise reached on CSDDD, scaling back scope and delaying full implementation after debates.
The European Council’s EU member states significantly scaled back the new CSDDD legislation and moved its implementation date further out, but they may save the corporate sustainability due diligence directive (CSDDD) following objections from Germany and Italy, despite earlier provisionally agreeing to the regulation.
The original directive applied to large companies with over 500 employees and a net worldwide turnover of over €150 million. Non-EU companies with a €300 million net turnover in the EU are also included, while the financial sector is temporarily excluded with a provision for future assessment. Following the scaling back, the legislation will only apply to companies with 1,000 employees and revenue greater than €450 million.
Another compromise was that the legislation would only be fully implemented five years after coming into force. Also, product disposal activities have been removed from the legislation’s scope.
The CSDDD legislation will now be sent back to the EU Parliament to consider the compromised text, with a final vote in April.
