On 5 July, 2024, the European Union has officially published the Corporate Sustainability Due Diligence Directive (CSDDD) in the Official Journal of the European Union. This directive is a major step forward in ensuring responsible business practices of companies operating within the EU.
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The new EU Corporate Sustainability Due Diligence Directive (CSDDD) published on July 5, 2024, mandates annual compliance reporting for companies with over 1,000 employees or €450 million in turnover by July 2029, with larger companies starting in 2027. The reports will be publicly available for easy evaluation of companies’ sustainability efforts. We at cleversoft will support affected companies with a convenient solution for CSDDD reporting at an early stage.
Requirements
The CSDDD mandates comprehensive due diligence obligations for companies to ensure they address and mitigate adverse impacts on human rights and the environment. This includes the integration of due diligence into corporate strategies and the establishment of transparent reporting mechanisms. Additionally, in-scope companies are required to develop and execute climate transition plans and to set climate targets that are consistent with the objectives of the Paris Agreement, paving the way for a transition to a lower carbon economy.
Starting from July 26, 2029, companies are required to make their annual due diligence statements publicly available and to submit them to a designated authority for inclusion on the European Single Access Point (ESAP). This ensures that the information is easily accessible across the EU. The statements must be in a format that allows data to be extracted, or if required by law, in a machine-readable format. This process aims to standardize reporting and to increase transparency, making it easier for stakeholders to find and analyze company information related to sustainability efforts.
Implementation timeline
CSDDD will be implemented in three phases to allow smaller companies a little more time to comply with the new regulations. Here is an overview of the key milestones:
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Immediate Effect:
The directive has been published and is now in force (as of July 5, 2024
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Transposition into National Law:
EU Member States are required to transpose the directive into national law until July 26, 2026
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CSDDD-Application in three phases:
The CSDDD will apply on a phased basis for in-scope companies as follows:
July 26, 2027:
Large EU companies with more than 5 000 employees and EUR 1 500 000 000 worldwide net turnover must comply by this date.July 26, 2028:
EU Companies with more than 3 000 employees and EUR 900 000 000 worldwide net turnover must comply by this date.July 26, 2029:
All other in-scope EU companies with more than 1 000 employees and EUR 450 000 000 worldwide net turnover must comply by this date. -
Ongoing Reporting:
Annual reporting on due diligence efforts and outcomes will be required starting one year after full compliance is mandated.
cleversoft Services
As part of our ongoing commitment to providing comprehensive and cutting-edge regulatory reporting solutions, we are analyzing the Corporate Sustainability Due Diligence Directive (CSDDD) for inclusion in our ESG Service portfolio. This addition will complement our existing reporting services, which currently support SFDR PASI Statement creation, Solvency II reporting, CSRD reporting Financial Statement creation and more.
If you have any questions about our services, please send us a message via the contact form on our website. Our experts will be happy to advise you on the details.
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