What the revised CSDDD means for Ireland’s largest companies

Following months of negotiation, EU legislators officially¹ adopted the ‘Omnibus’ directive on 24 February 2026 which narrowed the scope of the Corporate Sustainability Due Diligence Directive (CSDDD/CS3D), focusing mandatory due diligence on the largest market actors — those with the greatest influence on their chain of activities — while easing expectations for smaller companies.

What are the key aspects of the Directive? 

CSDDD requires companies to identify, prevent, mitigate and bring to an end actual and potential adverse human rights and environmental impacts in their own operations, subsidiaries and chains of activities, while embedding due diligence into corporate governance and decision-making. At a high level, companies must:

• Identify, assess and prioritise actual and potential adverse human rights and environmental impacts, based on risk factors and significance;
• Prevent and mitigate potential impacts and bring to an end or minimise actual impacts through appropriate measures, leveraging influence across business partners;
• Monitor, track and publicly communicate on the effectiveness of due diligence actions; and
• Integrate effective governance, including a due diligence policy, a complaints and notifications mechanism, stakeholder engagement, and board-level oversight.

What has changed as part of the ‘Omnibus’ agreement? 

Changes include:

• Narrowed scope (see above);
• Risk-based impact identification and assessment;
• Stronger safeguards for smaller companies against information requests;
• Removal of EU-level civil liability;
• Removal of requirement to prepare a climate transition plan; and
• Expanded monitoring requirement to (at least) every five years and after any significant changes occur.

These adjustments signal an intention to preserve the Directive’s core while easing certain obligations and increasing corporate protections. Given the scale of the revisions, a new review clause has been added, requiring a reassessment of both the scope and enforcement mechanisms in 2031.

Beyond compliance: the business case for due diligence 

It may be tempting to treat sustainability and human rights due diligence as optional, yet the core principle remains unchanged; a company can create value without relying on forced labour, unsafe working conditions, or destructive environmental practices.

In practice, this means asking not only whether your operations are profitable, but whether that profit depends on harm to workers, communities, or ecosystems. International standards such as the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct make it clear that the responsibility to respect human rights applies to all companies, regardless of size or legal thresholds.  

The business case is also increasingly compelling:  

• Adequate due diligence procedures help identify and address significant issues across an entity’s activities. These exercises can reveal operational inefficiencies, dependency on fragile suppliers, or exposure to climate- and conflict-related disruption. Serious incidents where an entity is directly involved can quickly escalate into public campaigns, boycotts or legal action. Addressing these issues can reduce risk, improve quality, and strengthen resilience.
• Larger companies that remain in scope will still need visibility and confidence throughout their supply chains. Therefore, suppliers able to demonstrate credible due diligence will be better placed to win and retain contracts.
• Investors, lenders and insurers are also tightening expectations. Investors may be more willing to invest or increase their investment in entities taking sustainable actions.
• Employees and consumers are also paying closer attention to how companies act, not just what they say.
• Demonstrating a willingness to go beyond minimum legal requirements can reinforce trust, support talent attraction, and differentiate your brand in crowded markets.

Voluntary alignment with emerging standards can also position companies ahead of the regulatory curve. Laws will continue to evolve, and building systems now is less costly than hurried compliance later. This is equally relevant for companies approaching the threshold, as expansion should not be slowed or stalled by fear of being in scope of the directive. Early movers will help shape expectations and industry practice, rather than simply reacting to them, while staying better prepared for future investor and customer demands.

As a result, despite the scoping reduction, stepping up on due diligence remains a strong strategic and responsible decision. It allows companies outside the immediate scope of CSDDD to build resilience, secure commercial opportunities, and maintain legitimacy with stakeholders, while contributing meaningfully to more sustainable and responsible global value chains.

Key actions for your entity

If your entity is in scope: 

• Revisit your overall due diligence roadmap in light of updated thresholds and altered requirements.
• Build a governance and accountability structure:designate responsible person(s), integrate due diligence into risk management.
• Perform an impact assessment and scoping exercise to identify potential adverse impacts within your own value chain, leveraging any existing Double Materiality Assessment (DMA) or other reporting requirements where relevant.
• Prioritise engagement with high-risk suppliers and affected stakeholders to identify adverse impacts and design effective remediation where necessary.
• Engage proactively with those in your chain of activities. Clarify expectations and new requirements. Update your contracts and supplier policy/code of conduct to align with due diligence requirements.

If your entity is out of scope: 

• Reassess whether your entity falls within the revised CSDDD thresholds and identify any foreseeable changes (such as acquisitions or expected growth) that may pull you into scope.
• Begin risk-mapping of your operations and key suppliers: identify high-risk areas (e.g. labour practices, environment, health and safety) and prioritise.
• Develop a supplier policy/code of conduct aligned with major buyer expectations and the CSDDD framework.
• Establish or improve data collection and traceability systems from upstream inputs to final product, so you can provide information when requested.
• Engage proactively with those in your chain of activities that fall under CSDDD scope: clarify expectations, share your action plan, highlight your readiness work as a differentiator.

We are here to help you

We’re here to help track your readiness, so you can move forward with clarity. Get in touch today.

If you want to understand what the CSDDD and the Omnibus agreement mean for your entity, we can help you assess the implications, shape your approach and fast-track your readiness, so you can move forward with clarity. Get in touch today.