The EU´s corporate Sustainability Due Diligence has been published

On 5 July, Directive (EU) 2024/1760 of the European Parliament and of the Council of 13 June 2024 on corporate sustainability due diligence ("CS3D") was published in the Official Journal of the European Union.

CS3D is the result of a legislative process initiated over two years ago by the European Commission — see Legal Flash (in Spanish) | Towards a mandatory standard of due diligence and corporate responsibility  Legal Flash | Progress on the Due Diligence Directive. CS3D establishes the duty of the company to identify, prevent, mitigate, correct, and remedy adverse effects on the environment and human rights resulting from, its operations, those of its subsidiaries, and its chain of activities (i.e., its business partners in a global market).

CS3D will enter into force 20 days after its publication (i.e., 25 July 2024). Member States have two years to transpose CS3D into national law (i.e. no later than 26 July 2026). Companies will start gradually applying the standard from 26 July 2027, depending on their size and turnover. However, it should be noted that companies that due to their size do not fall within the scope of CS3D must also implement due diligence human rights and environment risk management systems— see Post| The CS3D in perspective.

At the time CS3D will be transposed into national law, some of the in-scope companies (including listed companies) will have implemented internal processes to gather and organize sustainability information in order to comply with the transparency requirements of the Directive on Corporate Sustainability Reporting ("CSRD"). In 2025, CSRD in scope companies will have to report sustainability information in line with the EU Taxonomy (see Legal Flash | New developments in green taxonomy) and the  European Sustainability Reporting Standards (ESRS) for the 2024 financial year.

Cuatrecasas is launching a series of publications aimed at progressively demystifying corporate due diligence obligations. These publications will provide periodic insights to guide companies through the transition period that CS3D allows for adapting their operations and relationships within their activity chain. In our first publication (see Post| The CS3D in perspective), we explain how sustainability corporate due diligence is present in various European standards and applies to a broader spectrum of companies than that set by the CS3D.