What is the CSDDD and how does it affect fashion?
The CSDDD (Corporate Sustainability Due Diligence Directive) is the EU law requiring very large companies to address human rights and environmental harms in their value chains.
In short
The CSDDD is the EU Corporate Sustainability Due Diligence Directive. It obliges the largest companies to identify, prevent, mitigate and remedy adverse human rights and environmental impacts in their own operations, subsidiaries and chains of business partners, which in fashion means factories, mills and raw material suppliers.
How does it work in practice?
In-scope companies must embed due diligence in their policies, map where adverse impacts are most likely, take appropriate measures with business partners and provide complaint mechanisms. Under the amended text, due diligence is built around a scoping approach that prioritises the areas of highest risk based on reasonably available information.
What changed with the Omnibus?
- Scope: companies with more than 5,000 employees and net worldwide turnover above EUR 1.5 billion, with an equivalent EU turnover test for non-EU groups.
- Timing: transposition by 26 July 2028 and application from 26 July 2029.
- Penalties: capped at a maximum of 3% of net worldwide turnover.
- Removed: the EU-harmonised civil liability regime and the obligation to adopt climate transition plans.
Information requests to business partners with fewer than 5,000 employees should only be made when the information cannot reasonably be obtained by other means.
Why does it matter for fashion businesses?
Fashion supply chains involve labour-intensive production across many countries and tiers, so human rights risks are central. Even though few companies are directly in scope, their suppliers and wholesale partners will be asked for evidence of responsible practices.
How is AI changing it?
AI supports risk mapping by combining supplier lists, country and commodity risk data, news monitoring and audit results. Language models can screen documents in many languages, but decisions about remediation need human judgement and dialogue with affected stakeholders.
Common pitfalls
Relying only on audits, cutting off suppliers instead of working on remediation, and lacking visibility beyond tier 1 are common weaknesses.
Frequently asked questions
Which fashion companies fall under the CSDDD?
After the Omnibus I amendments, only companies with more than 5,000 employees and over EUR 1.5 billion net worldwide turnover are directly in scope, with a comparable EU turnover threshold for non-EU groups.
When does the CSDDD apply?
Member States must transpose the amended directive by 26 July 2028, and companies must comply from 26 July 2029.