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European Conference adopted CS3D

DQS Hong Kong

Founded in 1985 by the German Institute for Standardisation (DIN) and the German Society for Quality (DGQ), DQS is one of the world's most established independent management system certification bodies. DQS is a founding member of the International Certification Network (IQNet) and holds accreditations from the German Accreditation Body (DAkkS) alongside over 100 international accreditations, operating across more than 60 countries and regions.
Apr 25 , 2024

On April 24, 2024, after a lengthy legislative process, the European Parliament adopted the EU Corporate Sustainability Due Diligence Directive ("CSDDD" or "CS3D").

According to reports, the Directive will be passed to the Committee of the Permanent Representatives of the Governments of the Member States to the European Union for a vote in May. It will then go to the Competitiveness Council for a final vote. If adopted and published, CS3D will be transposed into national laws by EU member states within two years.

CS3D - Requirements for April 2024 Version

Perceived as an EU supply chain act, CS3D requires associated companies to conduct human rights and environmental due diligence and to integrate such due diligence into their management systems (including risk management and business operations systems). Mandatory due diligence identifies, addresses, prevents and mitigates adverse impacts on human rights and the environment, and establishes a legal basis for these companies to be held accountable for breaches of these obligations. The companies concerned are required to review not only their own activities, but also those of their subsidiaries or business partners along the value chain.

In addition, the Directive obliges the associated companies to adopt and implement a transition plan for climate change mitigation through best efforts.

 

Major Changes

As compared to the December 2023 version, the requirements of the CS3D have been reduced.

  • The regulation applies to companies with 1,000 employees and a net turnover of €450 million (global net turnover of EU companies and net turnover generated in the EU by non-EU companies);
  • The downstream part of the "series of activities" is limited to business partners carrying out activities for or on behalf of the company, with indirectly related companies no longer falling within the scope of the regulation;
  • Remove the obligation to promote the implementation of the Climate Transition Plan under the Paris Agreement through financial incentives.

 

Transition period

Depending on the sizes, the associated companies shall gradually implement the obligations set out in the CS3D in stages:

  • Companies with more than 5,000 employees and a turnover of €1.5 billion become applicable after a 3-year transition period;
  • Companies with more than 3,000 employees and a turnover of €900 million, after a transition period of 4 years;
  • for companies with more than 1,000 employees and a turnover of €450 million, after a transition period of 5 years.

For non-EU companies, the benchmark for the number of employees does not apply and is based on the turnover they generate in the EU.

 

Relevant companies' Preparation

If the CS3D comes into force, the obligations on companies will come into force at the earliest within the next 3 years, and companies need to start preparing their compliance work as early as possible. In addition, it cannot be ruled out that some large companies will require their suppliers to impose similar obligations on sub-suppliers in their terms of business. It is therefore important that other companies in the supply chain keep abreast of the developments in this legislation and the commercial requirements of the companies concerned.

 

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DQS Hong Kong

DQS – Leveraging Quality, Driving Success.

 

DQS empowers organizations worldwide to build trust, drive innovation, and achieve sustainable growth by certifying the future of business. Founded in 1985, DQS has grown into a global leader in the assessment and certification of management systems, with a team of 3,000 highly qualified auditors delivering over 130,000 audit days per year in more than 60 countries. Through internationally recognized certifications across 200+ standards, DQS helps businesses manage risks, ensure compliance, and unlock new opportunities in an evolving regulatory and business landscape.

 

Thinking beyond compliance, DQS is a trusted partner for digitalization, automation, and sustainability leadership. The company’s expertise covers a wide range of areas, spanning from cybersecurity and AI governance to ESG compliance, supply chain management, medical device safety, and future mobility, delivering real value to industries in their pursuit of resilient, sustainable, and intelligent systems. By leveraging advanced auditing methodologies, predictive analytics, and real-time insights, DQS supports organizations to future-proof their operations while demonstrating their commitment to excellence and responsible business practices.

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