ANALYSIS · 4 September 2026
EU Sustainability Law in 2026: What Directive (EU) 2026/470 Changes for Companies
The EU has redrawn the scope of the CSRD and CSDDD. The reform substantially narrows mandatory coverage, limits information requests along value chains and postpones key due-diligence deadlines.
A significant recalibration of EU sustainability regulation
Directive (EU) 2026/470 of 24 February 2026 materially reshapes EU corporate sustainability regulation. It amends Accounting Directive 2013/34/EU, the CSRD and the CSDDD. The reform does not abandon sustainability law; it concentrates mandatory obligations on the largest companies while seeking to reduce disproportionate burdens on smaller market participants.
CSRD: a substantially narrower scope
Mandatory sustainability reporting is tied to significantly higher thresholds: more than EUR 450 million in net turnover and an average of more than 1,000 employees. For parent undertakings the thresholds apply on a consolidated basis. Companies should therefore reassess scope.
Value-chain protection for smaller undertakings
Undertakings in the value chain with no more than 1,000 employees receive statutory protection against sustainability-information requests that exceed the information specified in the voluntary standards. This may in particular limit the de facto data pressure placed on suppliers.
Third-country undertakings
The regime for third-country undertakings is also narrowed, including Union turnover exceeding EUR 450 million in each of the two consecutive financial years and a threshold exceeding EUR 200 million for the relevant EU subsidiary or branch. International groups must therefore reassess whether they fall within scope.
CSDDD: focus on the very largest companies
For EU companies, the amended framework generally requires more than 5,000 employees and net worldwide turnover exceeding EUR 1.5 billion. Mandatory due diligence is thus concentrated on companies with the greatest economic reach.
More targeted information gathering
Information requests for in-depth assessments must be necessary, targeted and proportionate. For business partners with fewer than 5,000 employees, information should be requested only where it cannot reasonably be obtained by other means. The risk-based approach remains: companies are expected to focus on areas where adverse impacts are most likely or most severe.
Timetable and transposition
Member States must generally transpose the CSRD-related amendments by 19 March 2027 and CSDDD-related amendments by 26 July 2028. National due-diligence rules generally apply from 26 July 2029.
Practical implications
Fewer companies are directly subject to mandatory rules, but sustainability-related legal and market risks remain. Groups, suppliers and business partners should revisit reporting scope, due-diligence processes, contractual clauses and ESG data requests. The distinction between legally mandatory information, voluntary standards and data requested solely for contractual or market reasons will become increasingly important.
Primary legal source
Official text on EUR-Lex