The EU has passed the Corporate Sustainability Due Diligence Directive (CSDDD) requiring companies to mitigate their negative impact on human rights and the environment, due to come into effect for the largest businesses for reporting periods starting in 2027.

The new rules are set to hold corporations accountable for their impact on people and the planet and will apply to EU companies and parent companies with over 1,000 employees and a worldwide turnover higher than €450m (£387m).

It will also apply to companies with franchising or licensing agreements in the EU ensuring a common corporate identity with worldwide turnover higher than €80m (£68m) if at least €22.5m (£19m) of revenue was generated by royalties. This will capture global multinationals who frequently use royalties to shift earnings.

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