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’ such as core labour rights 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.

Over the past decade 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 of the European Union asked the European 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 included 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 CSDDD was substantially reviewed as part of a broader simplification exercise before the original deadline for transposition by the EU Member States. 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. Directive (EU) 2026/470 was published in the Official Journal on 26 February 2026 and this introduces substantial amendments as well as further delaying the entry into application of the new rules.