Directive (EU) 2024/1760 of the European Parliament and of the Council establishes a legal framework to ensure that companies operating in the internal market contribute to sustainable development and the transition to a sustainable economy. It requires companies to identify, prevent, mitigate, bring to an end and, where necessary, remedy actual or potential adverse human rights and environmental impacts linked to their own operations, subsidiaries and business partners across their chains of activities.

The Directive introduces a corporate due diligence duty encompassing six key steps, aligned with international standards such as the UN Guiding Principles and OECD Guidelines: integrating due diligence into policies and management systems; identifying and assessing adverse impacts; preventing and mitigating harm; monitoring effectiveness; communicating results; and providing remediation.

Large EU and non-EU companies meeting specified employee and turnover thresholds fall under the scope of these obligations. They must also adopt transition plans for climate change mitigation consistent with the 2050 climate neutrality objective under the Paris Agreement. The obligations are obligations of means, requiring companies to take appropriate and proportionate measures capable of achieving due diligence objectives.

Enforcement is ensured through administrative supervision by designated national authorities empowered to issue orders and impose effective, proportionate and dissuasive penalties. A European Network of Supervisory Authorities will coordinate national approaches. The Directive also establishes civil liability for failures to address adverse impacts and extends protection to persons reporting breaches.

In February 2026 the Commission proposed the Omnibus proposal amending the Corporate Sustainability Due Diligence Directive with a view to simplifying the duties and reducing regulatory burden, while preserving the original policy objectives. Under this proposal, the transposition deadline and the application of the Directive would be postponed. Member States would have to transpose the Directive by 26 July 2027, with phased application beginning on 26 July 2028.