CSRD vs CSDDD: Key Differences Explained

Status, September 2026:

• CSRD: The EU's Omnibus I directive (in force March 18, 2026) narrows the CSRD to companies with more than 1,000 employees and more than €450 million in net turnover. The amendments apply from financial year 2027, with first reports in 2028, and member states must transpose them by March 2027. Source: Council of the EU.
• CSDDD: The EU's Omnibus I directive (in force March 2026) narrows the CSDDD to companies with more than 5,000 employees and more than €1.5 billion in net turnover (and non-EU companies with more than €1.5 billion in EU turnover), and delays it: member states transpose it by July 26, 2028, and companies apply it from July 26, 2029. Source: PwC.

Quick Comparison

What is the CSRD?

The Corporate Sustainability Reporting Directive is the EU's comprehensive sustainability disclosure law. It requires in-scope companies to report on environmental, social, and governance topics under the European Sustainability Reporting Standards (ESRS), using a double materiality framework. The CSRD is fundamentally about transparency — companies must disclose their sustainability impacts, risks, governance, and targets so that investors and stakeholders can assess their performance.

As adopted in 2022, the CSRD was expected to reach about 50,000 companies. The Omnibus I directive (in force March 18, 2026) narrows it to companies with more than 1,000 employees and more than €450 million in net turnover, cutting the number in scope by around 90%. Companies newly in scope first report for financial year 2027, in 2028; listed SMEs are no longer covered; and non-EU groups with more than €450 million in EU net turnover and an EU subsidiary or branch above €200 million report from financial year 2028. Reports must receive limited assurance and be included in the management report, with digital tagging required once the Commission adopts tagging rules.

What is the CSDDD?

The Corporate Sustainability Due Diligence Directive (also known as CS3D) was adopted by the European Parliament in April 2024, amended by Omnibus I in 2026, and requires in-scope companies to conduct human rights and environmental due diligence across their operations and value chains. Unlike the CSRD, which mandates what companies disclose, the CSDDD mandates what companies do — they must identify, prevent, mitigate, and account for adverse human rights and environmental impacts.

The CSDDD applies to a narrower set of companies than the CSRD: after Omnibus I, EU companies with more than 5,000 employees and more than €1.5 billion in worldwide net turnover, and non-EU companies with more than €1.5 billion in net turnover generated in the EU. Omnibus I replaced the 2024 text's phase-in from 2027 with a single start date: member states transpose the directive by July 26, 2028, and companies apply it from July 26, 2029.

The directive's obligations include establishing and implementing a due diligence policy, identifying actual and potential adverse impacts, preventing and mitigating those impacts, providing remediation, engaging with affected stakeholders, establishing a complaints mechanism, monitoring effectiveness, and publicly communicating on due diligence. The 2024 text also required companies to adopt a climate transition plan aligned with the Paris Agreement's 1.5°C target; Omnibus I deleted that requirement.

Key Differences

1. Reporting vs Conduct

This is the fundamental distinction. The CSRD says: "Tell stakeholders about your sustainability performance, impacts, and risks." The CSDDD says: "Take action to prevent and address human rights and environmental harm in your value chain." The CSRD creates transparency obligations; the CSDDD creates behavioral obligations. A company can comply with CSRD through accurate disclosure of poor practices; the CSDDD requires the company to change those practices.

2. Scope and Thresholds

After Omnibus I, the CSRD captures companies with more than 1,000 employees and more than €450 million in net turnover. The CSDDD sets significantly higher thresholds (more than 5,000 employees and more than €1.5 billion in turnover). EU companies in CSDDD scope are also in CSRD scope, but most CSRD-subject companies will not face CSDDD obligations.

3. Enforcement Mechanism

CSRD non-compliance results in penalties related to inadequate or inaccurate disclosure, set under national law and enforced by national competent authorities. The CSDDD is enforced by national supervisory authorities, which can impose fines of up to 3% of a company's net worldwide turnover. The 2024 text also created an EU-wide civil liability regime; Omnibus I removed it, so whether affected persons can claim damages now depends on national law, although victims must receive full compensation where a company is held liable. Penalties for failing to act, and possible damages claims, are a different enforcement mechanism than CSRD's disclosure-based penalties.

4. Value Chain Depth

Both directives address the value chain, but differently. The CSRD requires companies to report on value chain impacts and risks based on their materiality assessment. The CSDDD requires companies to actively conduct due diligence on their value chain — identifying risks, engaging suppliers, implementing corrective actions, and monitoring outcomes. The CSDDD's value chain obligations are operational, not just informational.

5. Climate Transition Plans

The 2024 texts treated transition plans with different force. Under CSRD (ESRS E1), companies must disclose their transition plan or state that they don't have one. The CSDDD as adopted in 2024 required companies to adopt and implement a transition plan ensuring their business model and strategy are compatible with the 1.5°C target, but Omnibus I deleted that requirement in 2026. Neither directive now obliges a company to adopt a plan; the CSRD makes disclosure of the plan an obligation.

6. Subject Matter Focus

The CSRD covers the full ESG spectrum — environmental, social, and governance — through ten topical ESRS standards. The CSDDD focuses specifically on human rights (defined by reference to international instruments including the ICCPR, ICESCR, the Convention on the Rights of the Child, and core ILO conventions) and environmental impacts (defined by reference to international conventions on biodiversity, endangered species, mercury, persistent pollutants, hazardous chemicals and waste, and similar harms). The 2024 text addressed climate mainly through its transition-plan duty, which Omnibus I deleted. Governance topics like anti-corruption and business conduct are addressed by CSRD but not directly by the CSDDD.

7. Due Diligence Process Requirements

The CSDDD prescribes a specific due diligence process: policy adoption, impact identification, prevention and mitigation, remediation, stakeholder engagement, complaints mechanism, monitoring, and communication. The CSRD references due diligence through ESRS (particularly ESRS S1-S4 on workforce and affected communities) but does not mandate the same procedural requirements. The CSDDD is operationally more prescriptive.

Which One Do You Need?

CSRD applies based on size and EU nexus, at lower thresholds than the CSDDD. If you're an EU company with more than 1,000 employees and more than €450 million in net turnover, or a non-EU group with more than €450 million in EU turnover and a large EU subsidiary or branch, you're in scope. The obligation is disclosure.

CSDDD applies to fewer, larger companies. If you have more than 5,000 employees and more than €1.5 billion in worldwide net turnover (or, for non-EU companies, more than €1.5 billion in EU turnover), you'll face due diligence obligations from July 26, 2029.

Both apply to large companies meeting both sets of thresholds. In this case, the CSDDD's due diligence processes will generate the information and governance structures that feed CSRD disclosures — they are designed to work in tandem.

Can You Use Both?

They're designed as complementary parts of the EU's sustainability regulation framework. The CSDDD generates the due diligence activity; the CSRD reports on it. Companies subject to both should build integrated compliance systems where the due diligence process (CSDDD) produces data, findings, and outcomes that are then disclosed in the sustainability statement (CSRD).

The ESRS explicitly reference due diligence processes consistent with the CSDDD's requirements. ESRS S1-S4 (social standards) ask companies to describe their due diligence for workforce and value chain impacts — disclosures that map directly to CSDDD obligations. Organizations that implement robust CSDDD due diligence will find CSRD social disclosures straightforward to prepare.

Council Fire's Perspective

The CSRD and CSDDD represent two sides of the EU's approach to corporate sustainability: transparency and accountability. We see them as inextricable — good reporting requires good practice, and good practice should be transparent. Companies that treat these as separate compliance workstreams are missing the architecture.

Our practical advice is to start with the CSDDD's due diligence framework — identify your value chain risks, build stakeholder engagement processes, establish complaints mechanisms — and then let those activities feed your CSRD disclosures. Companies that have robust due diligence processes produce better sustainability reports with less incremental effort. Conversely, companies that focus only on CSRD reporting without the underlying due diligence practice will find themselves in a precarious position when CSDDD obligations arrive.

Frequently Asked Questions

If I'm only subject to CSRD (not CSDDD), do I need to do due diligence?

The ESRS reference due diligence as part of sustainability reporting, particularly in the social standards (S1-S4). While the CSRD doesn't impose the same procedural obligations as the CSDDD, the ESRS expect companies to describe their due diligence processes. Companies subject only to CSRD should still conduct meaningful due diligence to support credible disclosures, even if the formal CSDDD obligations don't apply.

Can CSDDD compliance help with CSRD reporting?

Absolutely. The due diligence processes required by the CSDDD — risk identification, stakeholder engagement, remediation tracking, monitoring — directly produce the information needed for CSRD social and environmental disclosures. Companies implementing CSDDD will find that much of the data and narrative content for ESRS S1-S4 (and relevant environmental standards) flows from their due diligence activities.

What's the civil liability risk under the CSDDD?

Lower than the 2024 text suggested. As adopted, the CSDDD created an EU-wide civil liability regime for harm caused by a failure to carry out due diligence, but Omnibus I removed it in 2026. Whether affected individuals and communities can sue now depends on each member state's civil liability law; where a company is held liable under national law, victims have a right to full compensation, without punitive damages. Companies still face supervisory fines of up to 3% of net worldwide turnover. This creates a different risk profile than CSRD, where the consequence of non-compliance is regulatory penalties for inadequate disclosure.

How do the timelines interact?

CSRD is already in effect: the first companies published reports in 2025 (for fiscal year 2024), and companies newly in scope under Omnibus I first report for fiscal year 2027, in 2028. The CSDDD applies to all companies in scope from July 26, 2029. Companies subject to both should use their early CSRD reporting cycles to build the governance structures and data systems that will support CSDDD compliance when it arrives. Treating the CSRD years as preparation for CSDDD is a pragmatic approach.