The Directive covers EU Companies with more than 1,000 employees on average and had a net worldwide turnover of more than €450,000 in the last financial year for which annual financial statements have been or should have been adopted; and non-EU Companies generating a net turnover of more than €450,000,000 in the Union in the financial year preceding the last financial year. There is a potential exemption for parent companies that are merely holding companies. Adverse environmental and human rights impacts are defined in Annexes Two and One respectively by reference to a list of environmental and human rights instruments.

Member States are to ensure that in-scope companies conduct risk-based human rights and environmental due diligence by: integrating due diligence into company policies and risk management systems; identifying and assessing actual and potential adverse impacts; prioritisation of identified actual and potential adverse impacts; preventing adverse impacts; bringing actual adverse impacts to an end; remediation of actual adverse impacts; and undertaking meaningful engagement with stakeholders. In-scope companies must adopt a plan ensuring that their business model and strategy are compatible with the Paris agreement on climate change.

The Directive provides rules on penalties for non-compliance and provides for a Union-wide civil liability regime in regard to infringement of the due diligence obligations imposed on in-scope companies. Compliance with the CSDDD could also be qualified as a criterion for the award of public contracts and concessions.

Member States are to adopt and publish, by 26 July 2027, the laws, regulations and administrative provisions necessary to comply with this Directive. They shall apply those measures starting from 26 July 2028 for the first group of in-scope companies.