Corporate Environmental and Climate Due Diligence and Reporting in the EU

The document analyzes the CSDDD's environmental scope, due diligence obligations, and enforcement mechanisms following the Omnibus I Directive amendments. It argues that the current scope is too narrow, particularly regarding downstream activities and climate transition plans, and recommends that Member States use their transposition discretion to strengthen environmental protections, ensure a comprehensive definition of environmental impacts, and establish robust civil liability and administrative enforcement regimes.

• The Omnibus I Directive significantly narrowed the CSDDD's scope to EU companies with over 5,000 employees and a net worldwide annual turnover above EUR 1.5 billion, covering an estimated 2,907 companies, which the authors argue departs from international standards expecting all businesses to conduct due diligence.
• The CSDDD's definition of environmental impacts is considered overly restrictive because it relies on a limited list of international conventions and requires a link to human rights for many impacts, failing to capture the full corporate environmental footprint.
• Anthropogenic greenhouse gas (GHG) emissions should be interpreted as 'harmful emissions' under Point 15 of the CSDDD Annex, a view supported by recent judicial rulings and the need for coherence with the EU's climate goals.
• The CSDDD's downstream value chain coverage is limited to distribution, transport, and storage performed 'for or on behalf of the company', excluding the use and disposal of products, which creates significant gaps for the financial services sector and the 'polluter pays' principle.
• The complete deletion of Article 22 (climate transition plans) from the CSDDD removes a behavioral expectation for companies to actively decarbonize, potentially increasing legal uncertainty and litigation risk under national tort law.
• The CSDDD's due diligence process was weakened by the Omnibus I Directive through new limits on B2B information requests, longer monitoring intervals (extended to five years), and the removal of responsible termination requirements.
• Administrative supervisory authorities must be legally and functionally independent and proactive, using risk-based annual monitoring plans rather than acting solely on a reactive basis.
• The CSDDD requires Member States to maintain a civil liability regime for due diligence breaches, but the Omnibus I Directive removed the harmonized regime and the 'overriding mandatory provision' (OMP) clause, complicating cross-border cases.
• To ensure effective judicial protection, the authors argue that national liability regimes must cover non-intentional or negligent breaches and allow for liability even when the adverse impact occurred exclusively in the operations of a subsidiary or business partner.
• The report recommends that Member States designate their national CSDDD liability regimes as overriding mandatory provisions under Article 16 of the Rome II Regulation to ensure predictability and guarantee victims' rights to compensation regardless of where the harm occurred.

APA

Van den Berghe, A., Riccardi, F., Mautray, Q., & Otten, J. (2026). Corporate Environmental and Climate Due Diligence and Reporting in the EU. ClientEarth. https://www.clientearth.org/media/rminonpl/clientearth-updated-csddd-legal-analysis-and-recommendations-for-transpostion-final.pdf

Chicago

Van den Berghe, Amandine, Francesca Riccardi, Quentin Mautray, and Julia Otten. Corporate Environmental and Climate Due Diligence and Reporting in the EU. ClientEarth, 2026. https://www.clientearth.org/media/rminonpl/clientearth-updated-csddd-legal-analysis-and-recommendations-for-transpostion-final.pdf.

Wikipedia

{{cite report |last1=Van den Berghe |first1=Amandine |last2=Riccardi |first2=Francesca |last3=Mautray |first3=Quentin |last4=Otten |first4=Julia |title=Corporate Environmental and Climate Due Diligence and Reporting in the EU |publisher=ClientEarth |date=September 2026 |url=https://www.clientearth.org/media/rminonpl/clientearth-updated-csddd-legal-analysis-and-recommendations-for-transpostion-final.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{vandenberghe2026corporate, author = {Van den Berghe, Amandine and Riccardi, Francesca and Mautray, Quentin and Otten, Julia}, title = {{Corporate Environmental and Climate Due Diligence and Reporting in the EU}}, institution = {ClientEarth}, year = {2026}, month = sep, url = {https://www.clientearth.org/media/rminonpl/clientearth-updated-csddd-legal-analysis-and-recommendations-for-transpostion-final.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }