Corporate sustainability due diligence (CSDD) is a tool to ensure that companies monitor their own supply chains and ensure that ‘sustainability’ standards or other ‘values’ are respected along production processes. A number of International Organizations have been active in this area for some time: e.g. the UN, ILO, and OECD. International voluntary standards also exist.

In recent years, certain EU Member States introduced national rules requiring companies to monitor their supply chains for human rights abuses such as forced labour. In December 2020, the Council asked the Commission to present a proposal for an EU legal framework on “sustainable corporate governance”, including cross-sector corporate due diligence along global value chains. In March 2021, the European Parliament echoed that call.

In 2024, the EU adopted Directive 2024/1760 (the ‘CSDDD’) which includes legally binding requirements to conduct due diligence that will impact all companies above a certain size. These include monitoring and reporting obligations. 

Despite only being adopted in 2024, the CSDD is under review as part of a broader simplification exercise. In April 2025 the EU adopted a ‘stop the clock’ Directive delaying entry in to force and extending the deadline for transposition for the EU Member States (July 2027). In June 2025, the Council adopted its negotiating position on the proposal for simplification.