Claire Bright is Associate Professor in Private Law as well as the Founder and Director of the NOVA Centre on Business, Human Rights and the Environment at NOVA Law School in Lisbon.
This blog post was originally published in the 4th edition of the newsletter of the OECD National Contact Point of Portugal.
Navigating and Transposing the Corporate Sustainability Due Diligence Directive (CSDDD)
Legal, Policy and Implementation Insights
On the 28th of May 2025, the NOVA Centre on Business, Human Rights and the Environment, together with the British Institute of International and Comparative Law and the University of KU Leuven, hosted a workshop entitled ‘Transposing the CSDDD – Navigating Legal Uncertainties amidst the Omnibus proposal and Implementation Challenges’.
The event brought together 20 policymakers from 9 European countries and over 30 experts from 15 countries across 5 continents from governments, academia, civil society, legal practice and business gathered to discuss how to effectively transpose the CSDDD into national law. The participants examined best practices, existing legislation (France, Germany, Norway), institutional design, and policy recommendations for ensuring meaningful human rights and environmental due diligence (HREDD).
Introduction
Our 2020 study for the European Commission had revealed limited and superficial adoption of human rights and environmental due diligence (HREDD) by companies, reinforcing the need for harmonized EU legislation. The study found strong stakeholder support for a mandatory framework grounded in international standards such as the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, emphasizing legal certainty, a level playing field, and minimal costs to business.
However, recent developments, including the Omnibus Proposal released in February 2025, have raised significant concerns due to its lack of impact assessment, weakened risk-based approach, and potential rollback of key accountability provisions. This shift toward competitiveness over sustainability has created uncertainty among businesses and regulators. As EU Member States move toward transposing the CSDDD, drawing on lessons from national HRDD laws—while safeguarding the directive’s original ambition—remains essential to ensuring effective and enforceable human rights and environmental due diligence across global value chains.
Key Insights from Panel I: Comparative Experiences in Implementing mHREDD laws
🇫🇷 France – Duty of Vigilance Law (DVL)
- Strengths: significant positive impact on corporate practices, strengthened corporate risk mapping, increased competitiveness of French companies, improved access to sustainable finance and clear civil liability provisions in the law and specialized judges.
- Gaps: Lack of enforcement body; SMEs receive little support; initial implementation guidance was limited. These gaps are addressed in the CSDDD.
- Lessons: Need for practical guidance, dedicated oversight by a supervisory body, and support for suppliers.
🇩🇪 Germany – Supply Chain Act (LkSG)
- Strengths: Triggered meaningful changes in corporate behaviour, HRDD integration into core operations; strong enforcement authority (BAFA) having adopted a supportive and dialogue-based approach and fostered collaborative learning process.
- Challenges: Tier 1 focus ignoring that many risks occurring deeper in the supply chain; misunderstanding of the law led to over-reliance on checklists and SMEs overwhelmed by trickle-down demands. These challenges are addressed in the CSDDD but the Omnibus proposal was seen as a backslide, replicating some of the weaknesses of the LkSG.
- Lessons: CSDDD must address deeper supply chain risks, avoid formalistic compliance, and introduce civil liability.
🇳🇴 Norway – Transparency Act
- Strengths: two recent surveys demonstrated the broadly positive impqact that the law has had on corporate practices. The law applies to ~9,000 companies, including SMEs, promotes risk-based due diligence, phased enforcement, and is aligned with international standards (the UNGPs and the OECD Guidelines).
- Challenges: Early compliance is surface-level; more practical guidance needed; CSOs lead grievance activity.
- Lessons: Clear expectations and collaborative oversight lead to real change.
Key Insights from Panel II: Overcoming Transposition Challenges
- Diverse National Approaches
- Member States are progressing unevenly. Most paused drafting due to the Omnibus proposal’s uncertainties.
- Ministries involved vary widely; the Netherlands is the only country to publish a draft law so far.
- Principles for Effective Transposition
- Anchor in international standards: UNGPs, OECD Guidelines.
- Emphasize a risk-based, proactive, and preventive approach.
- Ensure meaningful stakeholder engagement across all HRDD phases.
- Guarantee access to remedy through both grievance mechanisms and civil liability.
- Grievance Mechanisms
- Must be designed for effectiveness, trust, and accessibility, or risk harming rightsholders.
- Require strong design principles and local contextual sensitivity.
- Supervisory Authorities
- Must be independent, well-resourced, and capable of dialogue-based yet enforceable oversight.
- BAFA (Germany) and the Norwegian Consumer Authority offer strong models; France’s reliance on litigation alone is insufficient.
- Policy and Political Realities
- Political momentum is fragile; Omnibus uncertainty stalls national action.
- Support is needed for SMEs, civil society, and regulators to ensure implementation matches ambition.
Key Insights from Panel III: Accompanying Measures for Effective Implementation
Effective transposition also depends on robust accompanying measures, including:
- support tools for SMEs: Portugal’s national strategy to support SMEs was showcased as a promising example: a three-pillar approach (training, digital reporting tools, and mentoring by large corporations) proved effective in promoting ESG alignment. This initiative was grounded in broad stakeholder consultation and political consensus, demonstrating that inclusive dialogue.
- guidance, notably on:
- risk-based due diligence
- responsible contracting practices which can play a key role in implementing due diligence obligations—if designed modularly and used collaboratively. In particular, they must ensure a “shared responsibility” approach between the parties, ensuring buyers remain accountable for their own practices. The European Model Clauses can serve as a model in that respect.
- gender-responsive due diligence, which remains under-implemented despite emerging legal obligations
Additional focus was given to, and to trade unions, whose inclusion and support in due diligence processes—via research, training, and collective mechanisms—was seen as essential for credible stakeholder participation.
Conclusions and key Recommendations
- Establish independent, well-resourced supervisory authorities.
- Ground national laws in a risk-based, internationally aligned framework.
- Ensure stakeholder engagement and access to remedy throughout the due diligence process.
- Design effective civil liability provisions and grievance mechanisms.
- Promote transparent reporting and data use for accountability.
- Invest in SME support, and capacity building,
- Provide implementation guidance notably on risk-based due diligence, responsible contracting practices and gender-responsible due diligence.
Suggested citation: C. Bright ‘Navigating and Transposing the Corporate Sustainability Due Diligence Directive (CSDDD) – Legal, Policy and Implementation Insights‘, Nova Centre on Business, Human Rights and the Environment Blog, 26 May 2025