EU CSDDD: What the Corporate Sustainability Due Diligence Directive Means for Suppliers
CSRD vs CSDDD: Two Different Obligations
The EU has two major corporate sustainability directives that affect supply chains. Most suppliers have heard of CSRD — but CSDDD is different and in some ways more directly disruptive for supply chain relationships.
| Directive | Full name | What it requires |
|---|---|---|
| CSRD | Corporate Sustainability Reporting Directive | Annual sustainability reporting including Scope 3 emissions |
| CSDDD | Corporate Sustainability Due Diligence Directive | Active identification and remediation of adverse impacts in supply chains |
CSRD says: "Report on your supply chain." CSDDD says: "Investigate your supply chain and fix problems."
What Does CSDDD Actually Require?
CSDDD (Directive 2024/1760/EU, adopted June 2024) requires large companies to conduct ongoing human rights and environmental due diligence across their entire value chain. Key obligations include:
- Map the supply chain — identify direct (Tier 1) and indirect (Tier 2+) suppliers
- Identify adverse impacts — assess actual and potential harms, including climate-related environmental damage
- Prevent and mitigate — take action to address identified impacts
- Establish a complaints mechanism — allow stakeholders (including suppliers) to raise concerns
- Report publicly — aligned with CSRD reporting, covered by the same sustainability statement
The environmental impacts covered include greenhouse gas emissions, deforestation, pollution, biodiversity loss, and water use.
Which Companies Are Subject to CSDDD?
CSDDD applies in phases:
| Phase | Company size | Start date |
|---|---|---|
| Phase 1 | 5,000+ employees AND €1.5bn+ turnover | 2027 |
| Phase 2 | 3,000+ employees AND €900m+ turnover | 2028 |
| Phase 3 | 1,000+ employees AND €450m+ turnover | 2029 |
Unlike CSRD, CSDDD does not extend to SMEs directly. However, large companies subject to CSDDD must conduct due diligence on their suppliers — which means they will ask SME suppliers for environmental data as part of their due diligence process.
What CSDDD Means for SME Suppliers in Practice
As a supplier to a CSDDD-subject company, you may be asked to:
- Complete due diligence questionnaires covering environmental practices — including GHG measurement and reduction targets
- Provide evidence of how you identify and manage your own environmental impacts
- Participate in capacity building — some large buyers will offer training or tools to help suppliers measure their emissions
- Accept audits — CSDDD due diligence may include on-site reviews or remote assessments of supplier environmental practices
The due diligence process is ongoing, not a one-time event. Buyers subject to CSDDD will re-assess suppliers periodically.
How Is CSDDD Different From the Questionnaires I Already Receive?
Current procurement questionnaires driven by CSRD Scope 3 obligations ask for your emissions data — tCO2e figures.
CSDDD-driven due diligence requests ask for evidence that you actively manage your environmental impacts. That means:
- Do you have an environmental policy? (Not just emissions, but a commitment to management)
- Do you have a reduction target?
- Do you track your emissions year-over-year?
- Do you assess your own supply chain for environmental impacts?
A Carbon Passport satisfies the "do you measure your emissions" question. An environmental policy, a reduction target, and year-on-year tracking complete the picture.
Preparing for CSDDD Due Diligence Now
- Generate a Carbon Passport — establishes your GHG measurement baseline
- Write a one-page environmental policy — covers your commitment to measuring and reducing
- Set a simple reduction target — "20% reduction in Scope 1+2 by 2030 against 2024 baseline"
- Plan for annual updates — CSDDD due diligence is ongoing; annual Carbon Passport renewal is the minimum
These four steps take less than two hours and position you as a compliant supplier under both CSRD and CSDDD frameworks.
Frequently Asked Questions
What is the difference between CSRD and CSDDD?
CSRD (Corporate Sustainability Reporting Directive) requires large companies to publish annual sustainability reports including Scope 3 emissions. CSDDD (Corporate Sustainability Due Diligence Directive) requires large companies to actively identify, prevent, and address adverse human rights and environmental impacts in their supply chains — and report on this process. CSRD is about transparency; CSDDD is about action.
When does CSDDD come into force and who does it apply to?
CSDDD was adopted in June 2024. Phase 1 (5,000+ employees, €1.5bn+ turnover) applies from 2027. Phase 2 (3,000+ employees, €900m+ turnover) from 2028. Phase 3 (1,000+ employees, €450m+ turnover) from 2029. CSDDD does not directly apply to SMEs — but large companies subject to it must conduct due diligence on their suppliers, generating data requests that flow down the supply chain to SMEs.
What will CSDDD due diligence questionnaires ask SME suppliers?
CSDDD due diligence questionnaires are likely to ask: Do you measure your GHG emissions? Do you have an environmental policy? Do you have a reduction target? Do you assess environmental risks in your own supply chain? Have you had any environmental violations or fines? How do you manage hazardous substances? A Carbon Passport satisfies the emissions measurement question; a written environmental policy and reduction target cover the remaining environmental requirements.
Is CSDDD only about human rights or does it cover carbon too?
CSDDD covers both human rights and environmental due diligence. The environmental scope includes: climate change (GHG emissions and reduction), pollution prevention, biodiversity and ecosystem protection, sustainable land use, and water management. GHG emissions are explicitly in scope — making carbon measurement a CSDDD due diligence requirement for companies subject to the directive and their supply chains.
How can I prepare for CSDDD due diligence as an SME supplier now?
Three steps now: (1) generate a Carbon Passport on DeCarbonOPS — establishes your GHG measurement baseline for the emissions questions; (2) write a one-page environmental policy signed by a director; (3) set a basic reduction target ('20% reduction in Scope 1+2 by 2030 against 2024 baseline'). These three actions take under two hours and position you as a compliant supplier under both CSRD and CSDDD frameworks.
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