EP’s First Reading on the Proposal to Amend the Corporate Sustainability Due Diligence Directive

On 16 December 2025, the European Parliament approved at first reading the proposal for a directive amending, among other legislative measures, Directive (EU) 2024/1760 on corporate sustainability due diligence (CSDDD).

The proposal now awaits approval by the Council of the European Union.

As reported on this blog, the amending directive, part of the Omnibus Simplification Package, aims to recalibrate certain corporate sustainability reporting and due diligence obligations.

Both the scope of application of the CSDDD and several of its substantive provisions are affected by the proposed directive.

As regards the scope, the due diligence obligations in the CSDDD will apply only to EU companies with more than 5,000 employees and a net annual turnover exceeding 1.5 billion Euros. Non-EU companies generating the latter turnover within the EU would also be covered.

The substantive amendments concern, inter alia, the provisions whereby a company is required to adopt and implement transition plans ensuring the compatibility of its business model with the transition to a sustainable economy (these will no longer appear in the CSDDD, as amended), and the provisions on the identification and assessment of adverse impacts (which will be adjusted and mitigated). The rules on  penalties will also be affected.

Of particular interest for the readers of this blog are the changes affecting Article 29 of the CSDDD on the civil liability of companies. While some elements of the existing provision are retained, others have been removed or reformulated.

Article 29(1) establishes an autonomous EU-level basis for civil liability, defining when companies incur liability for intentional or negligent breaches of their due diligence obligations under Articles 10 and 11, while excluding liability where damage is caused solely by business partners. This paragraph would be deleted under the amending directive, meaning that the above issues will be left to the applicable national law.

Article 29(2) links the right to full compensation to liability established under paragraph 1 and expressly excludes punitive or multiple damages. The directive, as amended, will preserve the right to full compensation but anchors it in national civil liability regimes.

Article 29(3) is concerned with remedies and access to justice, and covers issues such as limitation periods, litigation costs, injunctive relief, representative actions and access to evidence. Most safeguards remain unchanged, but the proposal deletes point (d), which set out the obligation to allow trade unions, NGOs or national human rights institutions to bring actions on behalf of alleged injured parties.

Article 29(4) clarifies that participation in industry or multi-stakeholder initiatives, third-party verification or contractual clauses does not exclude liability. The directive, as amended, refers this provision to liability under national law, consistently with the removal of an EU-harmonised liability regime.

Article 29(5) preserves the liability of subsidiaries and business partners and expressly provides for joint and several liability where damage is caused jointly. The provision will be narrowed under the amended directive, stating only that the company’s liability is without prejudice to that of its subsidiaries or business partners, without any express reference to joint and several liability.

Article 29(7) provides that Member States shall ensure that the provisions of national law transposing the Article are of overriding mandatory application in cases where the law applicable to claims to that effect is not the national law of a Member State. This paragraph will no longer appear in the amended directive.

A review clause has nevertheless been introduced, requiring the Commission to reassess the need for an EU-level liability regime at a later stage.

Under the amended rules, the deadline for transposition of the CSDDD is postponed by one year, to 26 July 2028. The companies concerned will be required to comply with the new obligations from 26 July 2029.