European Parliament First Reading on the Proposal Amending Corporate Sustainability Due Diligence Directive

As reported on this blog, the European Commission published on 26 February 2025 a proposal for a directive amending Directives 2006/43, 2013/34, 2022/2464 and 2024/1760. The initiative, part of the Omnibus Simplification Package, seeks to adjust certain corporate sustainability reporting and due diligence obligations.

On 1 April 2025, the European Parliament invoked the urgent procedure under Article 170 of its Rules of Procedure to expedite its review of the proposal in the parts aimed at postponing the implementation of social and environmental reporting, as well as due diligence requirements.

The Parliament adopted on 3 April 2025 its position at first reading voting overwhelmingly — 531 in favour, 69 against, and 17 abstentions — to postpone the transposition deadline and the initial phase of due diligence obligations under Directive 2024/1760 (the Corporate Sustainability Due Diligence Directive – CSDDD) by one year for the largest companies.

Consequently, according to the proposal, Member States have until 26 July 2027 to transpose the directive into their national laws. This one-year extension under the proposal also extends to the first group of companies subject to the new rules: EU-based companies with more than 3,000 employees and a net turnover exceeding € 900 million, and non-EU companies generating more than € 900 million in turnover in the EU. These companies will only have to apply the rules from 2028. For the other companies within the scope of the CSDDD, instead, the rules will have to be applied starting from 2029.

This decision by the European Parliament follows the Council’s Committee of Permanent Representatives (Coreper), which, on 26 March 2025, endorsed the Council’s negotiating position on the Commission’s proposal without amendments.

The proposal now requires formal approval by the Council of the European Union.