Corporate Sustainability Due Diligence Directive published – What is next?

The Corporate Sustainability Due Diligence Directive (the CSDDD) will enter into force on 25 July 2024 following its publication in the Official Journal of the European Union on Friday 5 July 2024. 

As discussed in our previous contribution of 15 May 2024, the CSDDD essentially introduces obligations for (very) large companies established in the EU - and under certain conditions outside of the EU - to:

• assess the human rights and environmental impacts of their activities throughout the supply chain, under the threat of civil liability; and
• adopt a transition plan for climate change mitigation. 

The Belgian legislator must now act by transposing the corresponding obligations into national law by 26 July 2026. 

As the CSDDD constitutes a minimum harmonization directive, Belgian law cannot provide for a lower level of protection, but may very well introduce a broader scope of application or more severe obligations (except with regard to identification and assessment, prevention or termination of adverse impacts). Therefore, it remains to be seen what the exact scope and extent of the corporate sustainability due diligence obligations in Belgium will be. Lydian will of course continue to keep you updated in this respect. 

As a reminder, the obligations will apply to companies in a phased way depending on their size. Now that the CSDDD effectively enters into force on 25 July 2024, the first wave of in-scope companies will have to comply by 26 July 2027 and the last by 26 July 2029. Again, companies not covered by the CSDDD as such may still be affected as a subsidiary or supply chain business partner of an in-scope company.