On 14 June 2026, the European Commission (Commission) opened a consultation on guidelines to support the implementation of the EU Corporate Sustainability Due Diligence Directive (CSDDD). As part of the CSDDD implementation process, the Commission is tasked with issuing guidelines on several areas, including the due diligence process, stakeholder engagement, and penalties. The consultation, which runs until 24 July 2026, will collect evidence to inform the drafting of these future guidelines.
The CSDDD will require in-scope companies to take steps to identify, prevent, mitigate, and bring to an end adverse impacts relating to human rights and the environment, both in their own operations and across aspects of their value chains. The CSDDD is intended to influence corporate behaviour and therefore sits alongside the Corporate Sustainability Reporting Directive (CSRD), which focuses on disclosure requirements. While the CSRD establishes reporting obligations, the CSDDD seeks to complement these by requiring companies to turn disclosed policies into actionable due diligence activities.
The CSDDD applies to the largest EU companies and non-EU companies that have significant turnover in the EU market, with thresholds amended by the EU Omnibus simplification process. For more information on the finalisation of the Omnibus process, including revised thresholds and amended requirements, refer to this Latham Article.
The consultation is intended to inform the development of guidelines that will support CSDDD implementation. These guidelines should provide:
The Commission also intends for the guidelines to be relevant to companies in non-EU countries that may be impacted by the CSDDD through the supply chains of in-scope companies. The CSDDD has extraterritorial reach, applying directly to large non-EU companies and also likely indirectly affecting multinational companies with complex global supply chains, even where such companies may not fall within its scope.
The consultation is structured as a questionnaire, with stakeholders able to provide free-form answers on a range of topics. For example, on the topic of “identification of adverse impacts”, stakeholders can share their experience with tools helpful for scoping exercises, comment on the cost-effectiveness of these tools, and highlight any legal obstacles encountered when collecting information as a result of third countries’ laws.
More broadly, the consultation focuses on gathering input on best practices for due diligence (with an emphasis on cost-effectiveness), as well as current obstacles or issues experienced by a broad range of stakeholders.
The consultation is open until 24 July 2026, and stakeholders can submit their views through the online questionnaire. Following the consultation period, Commission adoption of the guidelines is planned for Q1 2027, ahead of the due date of 26 July 2027.
This article was prepared with the assistance of Samantha Banfield at Latham & Watkins.
Latham & Watkins will continue to monitor developments relating to the CSDDD and the broader European sustainability regulatory landscape.