European Union – Directive on Corporate Sustainability Due Diligence (CSDDD)
The EU Member States must transpose CSDDD into national legislation by 26 July 2028. By 26 July 2029, the rules will start to apply to all in-scope companies. (timeline and scope amended by EU Omnibus in Feb 2026).
The directive requires companies to identify and root out negative human rights and environmental risks in their supply chains. It creates substantial new responsibilities for businesses with the aim of strengthening the visibility of risks while enabling greater accountability.
The PSCI is not a certification or compliance body but it offers tools to members that can used as part of your company’s due diligence processes.
Please note that this summary was drafted by the PSCI Secretariat. PSCI members and suppliers are advised to read the legislation in its entirety.
Legislative provisions
Due diligence must cover potential or actual adverse impacts linked to the:
- "Violation of the right of the child to have his or her best interests given primary consideration in all decisions and actions that affect children in accordance with Article 3 of the Convention of the Rights of the Child; violation of the right of the child to develop to his or her full potential in accordance with Article 6 of the Convention of the Rights of the Child; violation of the right of the child to the highest attainable standard of health in accordance with Article 24 of the Convention on the Rights of the Child; violation of the right to social security and an adequate standard of living in accordance with Article 26 and 27 of the Convention on the Rights of the Child; violation of the right to education in accordance with Article 28 of the Convention on the Rights of the Child; violation of the right of the child to be protected from all forms of sexual exploitation and sexual abuse and to be protected from being abducted, sold or moved illegally to a different place in or outside their country for the purpose of exploitation, in accordance with Articles 34 and 35 of the Convention of the Rights of the Child "violation of the prohibition of child labour pursuant to Article 32 of the Convention on the Rights of the Child, including the worst forms of child labour for children (persons below the age of 18 years) in accordance with Article 3 of the of the International Labour Organization Worst Forms of Child Labour Convention, 1999 (No. 182).
- Violation of the prohibition of the employment of a child under the age at which compulsory schooling is completed and, in any case, is not less than 15 years, except where the law of the place of employment so provides in accordance with Article 2 (4) and Articles 4 to 8 of the International Labour Organization Minimum Age Convention, 1973 (No. 138).
- Violation of the prohibition of child labour pursuant to Article 32 of the Convention on the Rights of the Child, including the worst forms of child labour for children (persons below the age of 18 years) in accordance with Article 3 of the of the International Labour Organization Worst Forms of Child Labour Convention, 1999 (No. 182). This includes:
(a) All forms of slavery or practices similar to slavery, such as the sale and
trafficking of children, debt bondage and serfdom, as well as forced or
compulsory labour, including the forced or compulsory recruitment of children for use in armed conflicts,
(b) The use, procuring or offering of a child for prostitution, for the production of pornography or for pornographic performances,
(c) The use, procuring or offering of a child for illicit activities, in particular for the production of or trafficking in drugs,
(d) Work which, by its nature or the circumstances in which it is carried out, is likely to harm the health, safety or morals of children"
(Directive, Article 3 (c) and Articles 5-11, and Annex, Part I, Section 1, 9., 10., 11.)
PSCI Principles
SAQ & Audit template
Human Rights and Labor section:
- Question 23: Does the facility or company ensure that no child labour takes place in their operations?
- Question 24: Please briefly describe the activities performed by young workers.
Resources
Legislative provisions
The following legislative provisions are included:
Due diligence must cover potential or actual adverse impacts linked to the "violation of the prohibition of unequal treatment in employment, unless this is justified by the requirements of the employment in accordance with Article 2 and Article 3 of the International Labour Organisation Equal Remuneration Convention, 1951 (No. 100), Article 1 and Article 2 of the International Labour Organisation Discrimination (Employment and Occupation) Convention, 1958 (No. 111) and Article 7 of the International Covenant on Economic, Social and Cultural Rights; unequal treatment includes, in particular, the payment of unequal remuneration for work of equal value"
(Directive, Article 3 (c), and Annex to the proposed Directive, Part I, Section 1, 16.)
PSCI Principles
SAQ & Audit template
Human Rights and Labor section:
- Question 25: How does the facility or company ensure that there is no harassment and discrimination in hiring, compensation, access to training, promotion, termination or retirement based on race, caste, national origin, religion, age, disability, gender, marital status, pregnancy, sexual orientation, union membership or political affiliation and is the corresponding policy in place?
Resources
Legislative provisions
The following legislative provisions are included:
Due diligence must cover potential or actual adverse impacts linked to the "violation of the prohibition of forced labour; this includes all work or service that is exacted from any person under the menace of any penalty and for which the said person has not offered himself or herself voluntarily, for example as a result of debt bondage or trafficking in human beings; excluded from forced labour are any work or services that comply with Article 2 (2) of International Labour Organization Forced Labour Convention, 1930 (No. 29) or with Article 8 (3) (b) and (c) of the International Covenant on Civil and Political Rights."
(Directive, Article 3 (c), and Annex to the proposed Directive, Part I, Section 1, 12.)
PSCI Principles
SAQ & Audit template
Human Rights and Labor section:
- Question 19: Has the company performed a risk assessment to determine if there are areas of their business risk for forced, bonded, indentured or involuntary prison labor?
- Question 20: Does the facility or company employ contract and/or migrant workers?
- If yes, from which countries/provinces:
- Are contract and/or migrant workers recruited through agencies? If so, who pays for recuitment fees and costs (visas, transport, medical etc)
- Is transport to their home country included as part of migrant worker contracts?
- Question 21: Does the facility keep any original documents belonging to employees (e.g., passports or birth certificates) during the term of employment?
- Question 22: Does the company maintain records of employee contracts that would demonstrate the terms and conditions of employment and termination?
Resources
Legislative provisions
The following legislative provisions are included:
Due diligence must cover potential or actual adverse impacts linked to the "violation of the right to freedom of association, assembly, the rights to organise and collective bargaining in accordance with Article 20 of the Universal Declaration of Human Rights, Articles 21 and 22 of the International Covenant on Civil and Political Rights, Article 8 of the International Covenant on Economic, Social and Cultural Rights, the International Labour Organization Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) and the International Labour Organization Right to Organise and Collective Bargaining Convention, 1949 (No. 98)"
(Directive, Article 3 (c), and Annex to the proposed Directive, Part I, Section 1, 15.)
PSCI Principles
SAQ & Audit template
Human Rights and Labor section:
- Question 25: How does the facility or company ensure that there is no harassment and discrimination in hiring, compensation, access to training, promotion, termination or retirement based on race, caste, national origin, religion, age, disability, gender, marital status, pregnancy, sexual orientation, union membership or political affiliation and is the corresponding policy in place?
- Question 31: What are the mechanisms in place to allow employees and management to collectively express concerns and issues?
Resources
Legislative provisions
The following legislative provisions are included:
Due diligence must cover potential or actual adverse impacts linked to the
- "Violation of the people's right to dispose of a land's natural resources and to not be deprived of means of subsistence in accordance with Article 1 of the International Covenant on Civil and Political Rights."
- "Violation of the prohibition to unlawfully evict or take land, forests and waters when acquiring, developing or otherwise use land, forests and waters, including by deforestation, the use of which secures the livelihood of a person in accordance with Article 11 of the International Covenant on Economic, Social and Cultural Rights.
- Violation of the indigenous peoples’ right to the lands, territories and resources which they have traditionally owned, occupied or otherwise used or acquired in accordance with Article 25, 26 (1) and (2), 27, and 29 (2) of the United Nations Declaration on the Rights of Indigenous Peoples."
(Directive, Article 3 (c), and Annex to the proposed Directive, Part I, Section 1, 1., 19., 20.)
PSCI Principles
Resources
Legislative provisions
The following legislative provisions are included:
"Due diligence must cover potential or actual adverse impacts linked to the:
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Violation of the prohibition of child labour pursuant to Article 32 of the Convention of the Rights of the Child, including the worst forms of child labour for children (persons below the age of 18 years) in accordance with Article 3 of the of the International Labour Organization Worst Forms of Child Labour Convention, 1999 (No. 182). This includes: [...] All forms of slavery or practices similar to slavery, such as the sale and trafficking of children, debt bondage and serfdom, as well as forced or compulsory labour, including the forced or compulsory recruitment of children for use in armed conflicts [...]
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Violation of the prohibition of all forms of slavery, practices akin to slavery, serfdom or other forms of domination or oppression in the workplace, such as extreme economic or sexual exploitation and humiliation in accordance with Article 4 of the Universal Declaration of Human Rights and Art. 8 of the International Covenant on Civil and Political Rights.
- Violation of the prohibition of human trafficking in accordance with Article 3 of the Palermo Protocol to Prevent, Suppress and Punish Trafficking in Persons Especially Women and Children, supplementing the United Nations Convention against Transnational Organized Crime."
(Directive, Article 3 (c), and Annex to the proposed Directive, Part I, Section 1, 11., 13., 14.)
PSCI Principles
SAQ & Audit template
Human Rights and Labor section:
- Question 19: Has the company performed a risk assessment to determine if there are areas of their business risk for forced, bonded, indentured or involuntary prison labor?
- Question 20: Does the facility or company employ contract and/or migrant workers?
- If yes, from which countries/provinces:
- Are contract and/or migrant workers recruited through agencies? If so, who pays for recuitment fees and costs (visas, transport, medical etc)
- Is transport to their home country included as part of migrant worker contracts?
- Question 21: Does the facility keep any original documents belonging to employees (e.g., passports or birth certificates) during the term of employment?
- Question 22: Does the company maintain records of employee contracts that would demonstrate the terms and conditions of employment and termination?
Resources
Legislative provisions
The following legislative provisions are included:
Due diligence must cover potential or actual adverse impacts linked to the "violation of the prohibition of withholding an adequate living wage in accordance with Article 7 of the International Covenant on Economic, Social and Cultural Rights."
(Directive, Article 3 (c), and Annex to the proposed Directive, Part I, Section 1, 17.)
PSCI Principles
SAQ & Audit template
Human Rights and Labor – Wages, Benefits and Working Hours:
- Question 26: How does the facility ensure that overtime is voluntary (except for legally defined situations of urgency or emergencies that require the full workforce)? What is the legal max. overtime as per applicable law?
- Question 27: Do employees have one full day off for every seven-day period on average?
- Question 28: Does the facility or company ensure that all wages are at or above the legal minimum or industry benchmark standards, whichever is higher (after deduction, not including overtime wages)?
- Question 29: Are workers paid in a timely manner in line with local laws and regulations?
- Question 30: Does the facility or company provide housing and/or living expenses as partial or complete payment of wages for any employees?
Resources
Legislative provisions
The following legislative provisions are included:
Due diligence must cover potential or actual adverse impacts linked to the "violation of the obligation to take the necessary measures related to the use of biological resources in order to avoid or minimize adverse impacts on biological diversity, in line with Article 10 (b) of the 1992 Convention on Biological Diversity and [taking into account possible amendments following the post 2020 UN Convention on Biological Diversity], including the obligations of the Cartagena Protocol on the development, handling, transport, use, transfer and release of living modified organisms and of the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization to the Convention on Biological Diversity of 12 October 2014"
(Directive, Article 3 (b) and Articles 5-11, and Annex to the proposed Directive, Part II, 1.)
PSCI Principles
SAQ & Audit template
Health & Safety Section:
- Question 101: Does the facility hold a regulatory permit for biological material operations?
- Question 102: Has the facility developed and implemented a Biological Safety Program?
- Question 103: Does this program include procedures to perform risk assessments of biological materials?
- Question 104: Does the facility have a bio-safety committee responsible for evaluating the risk associated with biological materials operations and determining control strategies?
- Question 105: Are engineering and/or administrative controls used to control employee exposure to biological materials?
- Question 106: Which types of biological materials are stored or handled on the site?
Legislative provisions
The following legislative provisions are included:
Due diligence must cover potential or actual adverse impacts linked to the:
- "Violation of the prohibition of the manufacture of mercury-added products pursuant to Article 4 (1) and Annex A Part I of the Minamata Convention on Mercury of 10 October 2013 (Minamata Convention);
- Violation of the prohibition of the use of mercury and mercury compounds in manufacturing processes within the meaning of Article 5 (2) and Annex B Part I of the Minamata Convention from the phase-out date specified in the Convention for the respective products and processes;
- Violation of the prohibition of the treatment of mercury waste contrary to the provisions of Article 11 (3) of the Minamata Convention"
- "Violation of the prohibition of importing a chemical listed in Annex III of the Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade(UNEP/FAO), adopted on 10 September 1998, as indicated by the importing Party to the Convention in line with the Prior Informed Consent (PIC) Procedure;
- Violation of the prohibition of the production and consumption of specific substances that deplete the ozone layer (i.e., CFCs, Halons, CTC, TCA, BCM, MB, HBFCs and HCFCs) after their phase-out pursuant to the Vienna Convention for the protection of the Ozone Layer and its Montreal Protocol on substances that deplete the Ozone Layer"
(Directive, Article 3 (b) and Articles 5-11, and Annex to the proposed Directive, Part II, 3., 4., 5., 8., 9.)
PSCI Principles
SAQ & Audit template
Environment Section:
- Question 37: Does the facility have the required environmental permits or authorizations?
- Question 41: Indicate [whether any Ozone depleting substances] are generated at the facility and describe the types of pollution control activities if used.
- Question 42: Has the facility developed and implemented a hazardous chemicals (including APIs) management program that includes development and maintenance of a current inventory of all hazardous chemicals (including APIs) used, manufactured or stored on-site, including those for production, maintenance, utilities, and laboratory purposes?
Health and Safety Section:
- Question 68: Does the site perform risk assessments that include consideration of chemical exposure through all routes of exposure?
Process Safety Section:
- Question 84: Please indicate the most hazardous process activities conducted at this facility (e.g. hazardous reaction types (nitration, hydrogenation, oxidation etc.), handling potent compounds and/or biological agents, handling flammable/dangerous materials etc.)
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative provisions
The following legislative provisions are included:
"Companies [shall] adopt and put into effect a transition plan for climate change mitigation which aims to ensure, through best efforts, that the business model and strategy of the company are compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °C in line with the Paris Agreement and the objective of achieving climate neutrality as established in Regulation (EU) 2021/1119, including its intermediate and 2050 climate neutrality targets, and where relevant, the exposure of the company to coal-, oil- and gas-related activities.
The design of the transition plan for climate change mitigation referred to in the first subparagraph shall contain:
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time-bound targets related to climate change for 2030 and in five-year steps up to 2050 based on conclusive scientific evidence and, where appropriate, absolute emission reduction targets for greenhouse gas for scope 1, scope 2 and scope 3 greenhouse gas emissions for each significant category;
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a description of decarbonisation levers identified and key actions planned to reach the targets referred to in point (a), including, where appropriate, changes in the product and service portfolio of the company and the adoption of new technologies;
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an explanation and quantification of the investments and funding supporting the implementation of the transition plan for climate change mitigation; and
- a description of the role of the administrative, management and supervisory bodies with regard to the transition plan for climate change mitigation."
(Directive, Article 22)
PSCI Principles
SAQ & Audit template
Environment Section:
- Question 33: Does the facility have documented environmental objectives or goals for performance improvement, including metrics and targets, [on greenhouse gas emissions]?
- Question 41: Indicate which of the following types of air emissions are generated at the facility, and describe the types of pollution control activities if used: [...] Ozone depleting substances, [...] Other Pollutants (e.g., GHG, cyanides, sulfides, ammonias, bromines, phosgene)
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative provisions
The following legislative provisions are included:
Due diligence must cover potential or actual adverse impacts linked to the "violation of the prohibition of causing any measurable environmental degradation, such as harmful soil change, water or air pollution, harmful emissions or excessive water consumption or other impact on natural resources, that:
- impairs the natural bases for the preservation and production of food or
- denies a person access to safe and clean drinking water or
- makes it difficult for a person to access sanitary facilities or destroys them or
- harms the health, safety, the normal use of property or land or the normal conduct of economic activity of a person or
- affects ecological integrity, such as deforestation, in accordance with Article 3 of the Universal Declaration of Human Rights, Article 5 of the International Covenant on Civil and Political Rights and Article 12 of the
International Covenant on Economic, Social and Cultural Rights"
(Directive, Article 3 (c), and Annex to the proposed Directive, Part I, Section 1, 18.)
PSCI Principles
Suppliers shall understand their impacts on biodiversity, reducing and mitigating their footprint wherever possible.
SAQ & Audit template
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Question 33: Does the facility have documented environmental objectives or goals for performance improvement, including metrics and targets? If yes, please describe goals, metrics, and/or targets and any improvements made in last 3 years.
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Do you track and have reduction programs in place for the following: [...] Amount of hazardous waste, Amount of non-hazardous waste [...] ?
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Does the facility publicly report data: If yes, where can the information be found? If no, please add comments
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Question 34: Have you assessed if your site is located in a water scarce region and if so, has the facility developed a long-term strategy for future water sourcing and management?
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Is the long-term continuity for future water sourcing and management already covered in the site-based Business Continuity Management plan?
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Does the facility have an authorisation/permit for water intake from groundwater, river or a public system?
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Does this authorisation/permit have any requirements that will restrict or stop your ability to obtain water?
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Question 38: Does the facility have a process to select and manage third-party waste treatment and disposal facilities and service providers?
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Question 39: Does the facility use any of the following waste disposal methods & locations [incineration, landfill, deep well, land application, other reuse & recycling]? Include explanation of how hazardous, including API containing waste (e.g. antibiotics), biohazardous, fermentation biomass, sludge/biosolids from waste water, non-hazardous waste etc. is disposed of.
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Question 40: Indicate which methods are used to manage process wastewater from this facility.
– Question 41: Indicate which of the following types of air emissions are generated at the facility and describe the types of pollution control activities if used:-
Volatile organic chemicals
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Corrosive vapors (e.g. acid, caustic)
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Particulates or dusts
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Ozone depleting substances
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Combustion by-products
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Other Pollutants (e.g., GHG, cyanides, sulfides, ammonias, bromines, phosgene)
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Question 42: Has the facility developed and implemented a hazardous chemicals (including APIs) management program that includes development and maintenance of a current inventory of all hazardous chemicals (including APIs) used, manufactured or stored on-site, including those for production, maintenance, utilities, and laboratory purposes?
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Question 43: Has the facility established good storm water management practices?
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Question 44: Does the facility transport any hazardous materials that are subject to a regulatory authority that specifies transportation requirements?
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Question 45: Does the facility or immediate surroundings external to the site have any known soil, surface water or groundwater contamination?
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Question 46: Has the facility addressed potential environmental risks arising from storing and handling hazardous substances, including petroleum products as APIs
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Question 47: Are tank truck, railcar, and other bulk transportation unit loading and unloading areas for hazardous substances provided with containment equivalent to at least 110% of the largest transportation unit handled in that area, or for compartmentalized transportation units, equivalent to at least 110% of the single largest compartment?
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative provisions
The following legislative provisions are included:
Due diligence must cover potential or actual adverse impacts linked to the:
- "Violation of the prohibition of exports of hazardous waste within the meaning of Article 1 (1) and other wastes within the meaning of Article 1 (2) of the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal of 22 March 1989 (Basel Convention) and within the meaning of Regulation (EC) No 1013/2006 of the European Parliament and of the Council of 14 June 2006 on shipments of waste (OJ L 190 of 12 July 2006 pp. 1-98) (Regulation (EC) No 1013/2006), as last amended by Commission Delegated Regulation (EU) 2020/2174 of 19 October 2020 (OJ L 433 of 22 December 2020 pp. 11-19):
- to a party that has prohibited the import of such hazardous and other wastes (Article 4 (1) (b) of the Basel Convention),
- to a state of import as defined in Article 2 no. 11 of the Basel Convention that does not consent in writing to the specific import, in the case where that state of import has not prohibited the import of such hazardous wastes (Article 4 (1) (c) of the Basel Convention),
(c) to a non-party to the Basel Convention (Article 4 (5) of the Basel Convention), - to a state of import if such hazardous wastes or other wastes are not managed in an environmentally sound manner in that state or elsewhere (Article 4 (8) sentence 1 of the Basel Convention)"
- "Violation of the prohibition of the handling, collection, storage and disposal of waste in a manner that is not environmentally sound in accordance with the regulations in force in the applicable jurisdiction under the provisions of Article 6 (1) (d) (i) and (ii) of the POPs Convention";
- "Violation of the prohibition of the export of hazardous wastes from countries listed in Annex VII to the Basel Convention to countries not listed in Annex VII (Article 4A of the Basel Convention, Article 36 of Regulation (EC) No 1013/2006)"
- "Violation of the prohibition of the import of hazardous wastes and other wastes from a non-party to the Basel Convention (Article 4 (5) of the Basel Convention"
- "Violation of the prohibition of the treatment of mercury waste contrary to the provisions of Article 11 (3) of the Minamata Convention"
(Directive, Article 3 (b) and Articles 5-11, and Annex to the proposed Directive, Part II, 5., 7., 10., 11., 12.)
PSCI Principles
SAQ & Audit template
Environment Section:
- Question 37: Does the facility have the required environmental permits or authorizations?
- Question 38: Does the facility have a process to select and manage third-party waste treatment and disposal facilities and service providers?
- Question 39: Does the facility use any of the following waste disposal methods & locations [incineration, landfill, deep well, land application, other reuse & recycling]? Include explanation of how hazardous, including API containing waste (e.g. antibiotics), biohazardous, fermentation biomass, sludge/biosolids from waste water, non-hazardous waste etc. is disposed of.
- Question 40: Indicate which methods are used to manage process wastewater from this facility.
- Question 44: Does the facility transport any hazardous materials that are subject to a regulatory authority that specifies transportation requirements?
- Question 46: Has the facility addressed potential environmental risks arising from storing and handling hazardous substances, including petroleum products as APIs
- Question 47: Are tank truck, railcar, and other bulk transportation unit loading and unloading areas for hazardous substances provided with containment equivalent to at least 110% of the largest transportation unit handled in that area, or for compartmentalized transportation units, equivalent to at least 110% of the single largest compartment?
Resources
You may find the following PSCI Resources useful as part of your company’s due diligence process on this issue:
Legislative provisions
The following legislative provisions are included:
Due diligence must cover potential or actual adverse impacts linked to the "Violation of the prohibition to import or export any specimen included in an Appendix of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) of 3 March 1973 without a permit, pursuant to Articles III, IV and V."
(Directive, Article 3 (b) and Articles 5-11, and Annex to the proposed Directive, Part II, 2.)
PSCI Principles
Resources
There are currently no PSCI resources on this topic.
Legislative provisions
The following legislative provisions are included:
"Companies conduct human rights and environmental due diligence [...] (‘due diligence’) by carrying out the following actions:
- integrating due diligence into their policies [...];
- identifying actual or potential adverse impacts [...];
- preventing and mitigating potential adverse impacts, and bringing actual adverse impacts to an end and minimising their extent [...];
- establishing and maintaining a complaints procedure [...];
- monitoring the effectiveness of their due diligence policy and measures [...];
- publicly communicating on due diligence"
Directive, Article 4(1)
PSCI Principles
SAQ & Audit template
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Question 6: Does the facility and/or company have policies and/or practices in place to risk assess their programs and potential impacts on responsible business conduct principles?
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Question 7: Does the facility or company have a process to manage all changes (e.g. raw materials, processes, personnel, non-GMP, facilities, etc.)?
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Question 8: Does the supplier have Business Continuity Management program in place to minimize the impact of potential business disruptions, including natural disaster?
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Question 9: Does the facility have security systems for controlling physical access to the facilities?
Resources
Civil and Political Rights
Legislative provisions
The following legislative provisions are included:
Due diligence must cover potential or actual adverse impacts linked to the:
- "Violation of the right to life and security in accordance with Article 3 of the Universal Declaration on Human Rights;
- Violation of the prohibition of torture, cruel, inhuman or degrading treatment in accordance with Article 5 of the Universal Declaration on Human rights;
- Violation of the right to liberty and security in accordance with Article 9 of the Universal Declaration on Human Rights;
- Violation of the prohibition of arbitrary or unlawful interference with a person's privacy, family, home or correspondence and attacks on their reputation, in accordance with Article 17 of the Universal Declaration on Human Rights;
- Violation of the prohibition of interference with the freedom of thought, conscience and religion in accordance with Article 18 of the Universal Declaration on Human Rights"
(Directive, Article 3 (c), and Annex to the proposed Directive, Part I, Section 1, 2., 3., 4., 5., 6.)
Resources
Freedom of Housing
Legislative provisions
The following legislative provisions are included:
Due diligence must cover potential or actual adverse impacts linked to the "Violation of the prohibition to restrict workers’ access to adequate housing, if the workforce is housed in accommodation provided by the company, and to restrict workers’ access to adequate food, clothing, and water and sanitation in the work place in accordance with Article 11 of the International Covenant on Economic, Social and Cultural Rights."
(Directive, Article 3 (c), and Annex to the proposed Directive, Part I, Section 1, 8.)
Resources
EU Companies:
- Companies with more than 5,000 employees and over €1.5 billion net turnover worldwide (on a consolidated basis for EU ultimate parent companies of corporate groups)
Non-EU Companies:
- Companies with over €1.5 billion net turnover generated in the EU (on a consolidated basis for non-EU ultimate parent companies of corporate groups).
(Scope narrowed down by EU Omnibus in Feb 2026)
Eligible companies must:
- Integrate due diligence into policies
- Identify actual or potential adverse human rights and environmental impacts
- Prevent or mitigate potential impacts
- Bring to an end or minimise actual impacts
- Establish and maintain a complaints procedure
- Monitor the effectiveness of the due diligence policy and measures
- Publicly communicate on due diligence
'Due diligence' must cover actual and potential adverse human rights and environmental impacts caused by the company's own activities or by the activities of its business partners in the 'chain of activities'.
'Chain of activities' is defined as follows:
- activities of a company’s upstream business partners related to the production of goods or the provision of services by that company, including the design, extraction, sourcing, manufacture, transport, storage and supply of raw materials, products or parts of products and the development of the product or the service; and
- activities of a company’s downstream business partners related to the distribution, transport and storage of a product of that company, where the business partners carry out those activities for the company or on behalf of the company, and excluding the distribution, transport and storage of a product that is subject to export controls under Regulation (EU) 2021/821 or to the export controls relating to weapons, munitions or war materials, once the export of the product is authorised.
Eligible companies must at least update and publish a due diligence policy every five years.
To include:
- A description of company’s long-term approach to due diligence
- Code of conduct for employees and subsidiaries
- Risk factors considered when identifying and assessing adverse impacts
- Description of the processes to implement due diligence, including risk identification and assessment steps that takes scoping and in-depth assessment into account
No specific sanctions are determined, instead, the Directive points to the mechanisms for determining the appropriate sanctions:
- Administrative supervision
- Appointed authority from the member states will impose sanctions like fines and compliance orders. Company’s efforts to comply with remedial action will determine whether sanctions are applied and to what extent
- European Network of Supervisory Authorities will be set up by Commission to allow nations to coordinate their efforts (see details below)
- Civil liability
- Victims can bring civil liability claim to national courts for damages resulting from an intentional or negligent failure to carry out due diligence.
- Omnibus removed the mandatory EU-wide civil liability regime. As of Feb 2026, civil liability for CSDDD breaches is subject to each Member State’s national rules and court procedures.
For companies who fail to comply with the directive, several injunction measures may be used, including fines of a maximum of 3% of the company’s net global turnover.
A European Network of Supervisory Authorities made up of representatives of the supervisory authorities in each EU state, will monitor cooperation and alignment.
- Companies based in the EU will be supervised by the authority in the state in which they have their registered office.
- Companies not based in the EU will be supervised by the supervisory authority in which they operate.
- If they operate in multiple EU states, their authority will reside in the state where they generate the highest turnover.