As the EU continues to refine its approach to sustainability, the Corporate Sustainability Due Diligence Directive (CSDDD) has undergone a significant overhaul. With the omnibus bill, food companies in Europe now face a redefined regulatory landscape. While some of the changes reduce compliance obligations, new challenges and opportunities have emerged that demand careful attention.
This in-depth guide will walk you through the key elements of the revised CSDDD, offering practical tips, examples, and actionable steps to help food companies navigate these changes while maintaining their leadership in sustainability.
Understanding the Revised CSDDD: What's New?
The European Union's Corporate Sustainability Due Diligence Directive (CSDDD) is undergoing significant revisions that will impact food companies operating within the EU. The recent updates, set to take effect in the coming years, aim to simplify the regulatory framework, reduce compliance burdens, and provide companies with more time to adapt to the evolving sustainability landscape.
1. Postponed Reporting Requirements
One of the most notable changes is the postponement of sustainability reporting deadlines. The application of certain reporting requirements will now be delayed, allowing companies more time to adjust to the new rules.
For companies with over 500 employees and a turnover above €450 million, compliance deadlines have been shifted by one year. This extended timeline provides businesses with extra time to align their reporting processes, particularly for those juggling other regulatory requirements. The deadlines for smaller companies have also been delayed, giving them additional time to prepare for compliance without rushing to meet the original deadlines.
2. Simplified Scope for Smaller Companies
The revised CSDDD reduces the number of companies subject to full reporting obligations, focusing primarily on larger enterprises. While smaller and medium-sized enterprises (SMEs) won’t face the same level of scrutiny, they are still indirectly impacted. Larger customers will expect them to provide sustainability data, especially as food companies with extensive supply chains seek to ensure that their suppliers meet due diligence standards.
While the revisions ease the burden on SMEs, it’s important for them to stay prepared for data requests from larger companies that must comply with the updated regulations.
3. Delayed Application of Due Diligence Measures
The due diligence measures within the CSDDD are now set to apply in phases, starting with the largest companies in July 2027. The revised schedule gives companies more time to implement necessary changes and refine their internal processes.
For example, companies with 3,000+ employees and a turnover exceeding €900 million will need to start complying by July 2028, while all remaining companies will need to follow by July 2029. This staggered timeline ensures that companies of different sizes have adequate time to prepare and adapt to the new regulations.
4. Focus on Digital Tools for Due Diligence
The revised CSDDD highlights the growing importance of digital tools for streamlining data collection, verification, and reporting. With the increasing complexity of global supply chains, food companies will need to adopt efficient platforms to manage large volumes of sustainability data.
Investing in automated reporting tools can help companies gather data more efficiently, ensuring compliance with the revised directive while minimizing the manual work involved. These tools will also ensure that food companies can meet the growing demand for machine-readable and digital sustainability information.
5. A Collaborative Approach with Suppliers
While the revised CSDDD eliminates the strict requirement to sever relationships with non-compliant suppliers, it encourages companies to take a more collaborative approach. Food companies should focus on engaging suppliers in corrective actions, rather than immediately cutting ties.
This shift means that companies must work with their suppliers to help them meet compliance requirements, whether it’s improving traceability systems or addressing deforestation or labor violations. By fostering a collaborative environment, companies can build stronger, long-term relationships while also ensuring compliance with sustainability expectations.
What Does This Mean for Your Company?
The revised CSDDD presents new opportunities for food companies to streamline their compliance processes and reduce reporting burdens. With longer timelines and a simplified approach, businesses can adapt more gradually while still ensuring that they meet sustainability standards.
However, while the revisions make compliance less demanding, proactive action is still essential. Here are some tips to stay ahead of the curve:
- Use the extra time wisely: Take advantage of the extended deadlines to improve your due diligence practices and invest in digital tools for easier data collection.
- Collaborate with suppliers: Work with your suppliers to ensure they meet your sustainability standards, even if they’re not directly required to comply with the CSDDD.
- Prepare for future regulations: As regulations evolve, it’s crucial to stay informed about potential changes and make adjustments to your practices before new deadlines hit.
Step-by-Step CSDDD Compliance Checklist (Updated for 2025)
1. Update Your Corporate Sustainability Policies
A strong and up-to-date sustainability policy is crucial for ensuring that your company remains compliant with the revised CSDDD. Here’s what to do:
- Update internal sustainability policies: Ensure your internal policies are aligned with the new supply chain scope. This includes revisiting how your company approaches due diligence, human rights monitoring, and environmental protection. Your policies should now focus specifically on Tier 1 suppliers, as deeper supply chain levels are no longer required under the revised rules. If your company sources cocoa from farmers in developing countries, ensure that the policies specifically outline the expectations for these direct suppliersrather than cascading obligations down to the entire supply chain.
- Integrate a supplier code of conduct: While Tier 2 and beyond are no longer explicitly part of due diligence requirements, adopting a supplier code of conduct is still beneficial. This code should clearly define your expectations on sustainable sourcing, worker rights, and environmental impact. It encourages suppliers to uphold high standards even if they are not directly regulated. Make your code of conduct accessible and easy to understand for all suppliers. Include practical, clear guidelines on how they should report any violations. This transparency will improve supplier compliance and strengthen the integrity of your supply chain.
- Train relevant departments: Ensure that all internal departments responsible for compliance, procurement, and ESG (Environmental, Social, Governance) matters are fully trained on the updated CSDDD obligations. It’s important that departments understand the practical implications of these changes and can apply them to their day-to-day work.
✅ Even though the requirements have been reduced, maintaining high sustainability standards is crucial to meeting the expectations of investors, consumers, and regulatory bodies.
2. Adjust Supply Chain Due Diligence Processes
The revised CSDDD places a stronger emphasis on direct suppliers rather than extending through the entire supply chain. Companies should:
- Identify and assess Tier 1 suppliers only: The scope of due diligence has been narrowed, meaning businesses now only need to evaluate their direct suppliers (Tier 1). Previously, there was an obligation to extend due diligence further into the supply chain. This change significantly reduces the resources needed for comprehensive supply chain audits.
- Supplier audits every five years: Instead of annual audits, which were once required at deeper levels, the directive now calls for audits of Tier 1 suppliers at least every five years. This adjustment helps companies save on audit-related costs while still ensuring periodic review of suppliers’ compliance with sustainability and human rights standards.
- Establish contractual sustainability expectations: Even though the revised rules no longer mandate automatic termination clauses for non-compliant suppliers. companies should still set clear expectations for sustainability performance in contracts. Consider including performance-based incentives to encourage compliance without the need for penalties.
✅ Streamlining due diligence processes saves costs but still ensures transparency and accountability in the direct supply chain, which remains a key focus of the CSDDD.
3. Implement an Adapted Risk Management Framework
Although the relaxed liability framework under the updated CSDDD reduces exposure to direct legal risks, maintaining a robust risk management framework is still essential. Here’s what to consider:
- Conduct risk mapping: Continue to assess your supply chain for potential human rights violations or environmental risks. Even though the scope of due diligence is now more limited, businesses should still conduct comprehensive risk mapping in Tier 1 suppliers. This will help identify risks early and take proactive measures to mitigate them. If you source materials like palm oil, ensure that your risk mapping identifies potential issues related to deforestation, worker exploitation, and land rights disputes. Map out the locations of your Tier 1 suppliers to identify high-risk areas.
- Establish internal reporting structures: Having clear internal reporting mechanisms for ESG compliance is crucial. This ensures that any potential risks or violations are flagged early and addressed effectively. You should maintain a reporting structure that allows employees and stakeholders to raise concerns about human rights abuses, environmental harm, or other ESG risks. Set up a confidential online platform where employees and suppliers can report potential issues. Regularly remind everyone of the importance of speaking up and that their identity will be protected.
- Monitor supply chain regulations: While the CSDDD standardizes due diligence across the EU, individual Member States may introduce additional regulations or requirements. Stay informed about national-level regulations to ensure your company remains compliant across all jurisdictions. If your business operates in both Germany and France, ensure you’re tracking any region-specific changes to ESG regulations in those countries, as national policies may differ from the CSDDD.
✅ Even without the direct legal liability that once accompanied deeper supply chain monitoring, businesses must uphold strong ESG policies for reputational integrity and to meet evolving regulatory landscapes.
4. Establish and Maintain Grievance Mechanisms
Grievance mechanisms, though now focused on direct suppliers and a narrower stakeholder group, are still critical to maintaining a responsible supply chain. Companies should:
- Provide accessible grievance mechanisms: Ensure there are clear, accessible processes for workers, suppliers, and communities to raise grievances related to sustainability issues. This includes providing multiple ways to report issues, such as through hotlines, emails, or even in-person forums.
- Ensure confidentiality: It’s essential to protect the identity of whistleblowers. Ensure all grievance mechanisms are structured to maintain confidentiality, ensuring that individuals feel safe reporting any issues without fear of retaliation.
- Review grievance processes periodically: The effectiveness of grievance mechanisms can only be assessed through regular reviews. Periodically assess your mechanisms to ensure they remain effective, accessible, and trusted by stakeholders. Conduct an annual survey with suppliers and workers to assess how effectively your grievance mechanisms are working. Use this feedback to improve the system.
✅ Transparency in how you engage with stakeholders builds trust and strengthens your corporate reputation. A well-functioning grievance mechanism signals that you take responsibility for the supply chain's ethical standards.
5. Monitor and Report Sustainability Performance
The Corporate Sustainability Reporting Directive (CSRD) is another important framework to consider, as it complements the CSDDD by requiring large companies to disclose their sustainability performance. Here’s what to do:
- Monitor new reporting obligations: The updated CSRD applies only to large companies (those with more than 1,000 employees and a €450M turnover). If your company meets these thresholds, you must comply with its reporting requirements. Reporting under the CSRD typically involves both financial risks (how environmental, social, and governance factors might affect the business) and the company’s impact on the environment and society. For those below the CSRD threshold, consider voluntarily publishing an annual sustainability report to demonstrate your commitment to transparency and environmental impact.
- Prepare for double materiality reporting changes: The revised CSRD removes the requirement for double materiality reporting—which once required companies to disclose both the risks they face due to sustainability and their impact on the environment. However, while this may reduce the burden, it’s still recommended to voluntarily disclose your company’s environmental and social impact as it strengthens brand value and builds trust with consumers and investors. Even if you’re not legally obligated, voluntarily including double materiality in your annual report can show leadership in corporate responsibility and attract sustainability-focused investors.
- Delayed implementation: The CSRD implementation has been delayed by one year to give companies more time to adjust to the new reporting framework. Use this time to update your reporting systems and ensure you are aligned with the updated standards. Start preparing your reporting processes early. Use this extra year to refine data collection methods and integrate sustainability performance into your company’s broader reporting framework.
✅ While the CSRD’s reporting obligations have been relaxed, voluntary sustainability reporting can improve your company’s visibility and reputation, especially with stakeholders concerned about environmental and social issues.
Conclusion: Maintaining CSDDD Compliance in 2025
The updated CSDDD offers businesses more flexibility in terms of scope, reducing the complexity and resource load required for compliance. However, companies must not lose sight of the directive’s core principles—ensuring sustainability and supply chain transparency. By following this checklist, businesses can maintain strong sustainability practices that not only comply with the updated CSDDD but also promote a positive brand reputation and foster trust with consumers and investors. Stay informed, streamline processes, and continue working toward a more sustainable and responsible supply chain.
