CSDDD Light: less is more?

Authors: Johannes Hartlieb, Cornelia Lanser, Alexander Gimona

With its Omnibus initiative of February 26th, 2025, the EU Commission aims, among other things, to make the Corporate Sustainability Due Diligence Directive (CSDDD) more practical. In contrast to the original plan, the obligations for particularly large companies are now to take effect in 2028 instead of 2026. The content is also being adjusted: less bureaucracy, more clarity – at least in theory. But what exactly has changed?

A legislative balancing act between relief and upholding climate goals

The obligations remain, but are to be eased. The focus of the changes to the CSDDD lies in relieving companies from excessive bureaucracy without undermining the core intention – human rights and environmental responsibility along the supply chain.

The most important changes of the “Omnibus 1” initiative

Staggered application from 2028: The application of the obligations will be postponed to 2028 for companies with more than 5,000 employees and over EUR 1.5 billion in turnover. For companies with more than 1,000 employees and over EUR 450 million in turnover, it will remain at 2029.
Reduction of the liability regime: The uniform EU-wide civil liability is to be removed; instead, national liability rules will (exclusively) apply. This entails greater flexibility, but also potential legal uncertainties for affected parties due to the lack of a unified regulation.
“Due diligence light”? In the future, these obligations will primarily target direct business partners (Tier 1) – following the example of the German Supply Chain Due Diligence Act (LkSG). In-depth audits of indirect suppliers are only required if there are specific indications of risks with indirect suppliers.
Monitoring only every five years: Instead of annual assessments, companies will now only have to audit their supply chains every five years, unless there are specific reasons for doing so.
Optional termination of business relationships: The previous obligation to terminate a contract in the event of a due diligence breach is to be eliminated. Instead, a temporary suspension of cooperation (as a “milder measure”) is planned.
Climate plan remains, implementation voluntary: Companies are still required to submit a climate plan, but implementation of the listed measures is no longer mandatory.
Framework of fines eased: The maximum permissible fine of 5% of global turnover is no longer included in the draft. The specific (appropriate) design of penalties is now to be determined by the Member States.

Conclusion: less is more?

The planned changes to the CSDDD as part of the Omnibus 1 initiative are certainly bringing some movement into the complex web of European sustainability regulation. Under the motto “Less obligation, more discretion. Less pressure, more individual responsibility,” the Commission has attempted to soften the contours of the CSDDD. At first glance, this may seem like a welcome relief for many companies. However, the criticism is multifaceted: Upon closer inspection, the bureaucratic relief – especially for large companies – does not seem to go far enough.

Disclaimer

This article is for general information only and does not replace legal advice. Haslinger / Nagele Rechtsanwälte GmbH assumes no liability for the content and correctness of this article.