CS3D Directive: Duty of Care | ETERNITY Systems

Last updated: 05 / 01 / 2026

The CS3D directive (Corporate Sustainability Due Diligence Directive), which came into force on July 25, 2024, imposes a duty of care on companies regarding the risks and negative impacts on the environment, human rights, or society, linked to the sustainability of their business activities. The objective of this directive is to require companies to integrate sustainability into their strategies to promote responsible behavior.

How to reconcile economic performance and sustainability obligations? Better governance, control processes, scope and anticipation of new regulatory deadlines, ETERNITY Systems explains everything about the CS3D directive and the duty of care of companies.

Summary

The CS3D directive in summary

CS3D (or CSDDD) is a directive adopted by the European Parliament, validated by the European Council, and entered into force in July 2024.

It imposes on large European and foreign companies a duty of care to prevent human rights and environmental harm throughout their value chain.

The CSDDD is based on four pillars : liability extended to subsidiaries and partners, due diligence to anticipate risks, transparency of procedures and mandatory compensation in the event of damage.
It concerns companies with more than 1,000 employees and €450 million in turnover., as well as certain foreign franchises and companies operating in the EU.

What is CS3D?

CS3D, or Corporate Sustainability Due Diligence Directive (CSDDD), is a European directive that imposes a duty of care on large companies consisting of putting in place due diligence procedures to identify, prevent and correct negative impacts linked to human rights and the environment.

Inspired by the 2017 French law on the duty of vigilance, the CS3D directive broadens its scope and specifies the obligations to be met. These obligations are based on five key actions observed at each stage of the direct operations of companies and their subsidiaries : identify, prevent, suspend, mitigate and report negative impacts.

The CS3D directive covers several areas concerning social and environmental issues, such as:

Respect for fundamental human rights, including workers' health and freedoms.
The fight against forced labor and child labor.
Reducing greenhouse gas emissions.
Responsible management of hazardous waste.
Sustainable consumption of natural resources.
The protection of endangered species and biodiversity.
Prevention of soil, air and ocean pollution.

What is the difference between CSRD and CS3D?

The CSRD directive requires companies to publish standardized and verified reports on their ESG performance (environmental, social and governance), while the CS3D directive requires them to take concrete action to prevent and correct violations of human rights and the environment.

La CSRD (Corporate Sustainability Reporting Directive) is a European directive that requires companies to publish information on their sustainability performance. It governs how organizations must communicate their social, environmental, and governance impacts through sustainability reports aligned with European standards (ESRS).

La CS3D complements this approach by going beyond reporting. It introduces a legally binding duty of care that requires companies to act. They must therefore put in place procedures to identify, prevent and correct human rights and environmental abuses in their own activities, but also in those of their subsidiaries and business partners.

These two European directives are therefore complementary, the CSRD providing for a transparency obligation on sustainable practices and CS3D providing risk prevention and anticipation.

What are the guiding principles of the CSDDD?

The CSDDD is based on four principles:

Responsability
Due diligence
Transparency
Repair

These principles govern how companies must prevent and manage social and environmental risks related to their activities. Article 7 of the directive specifies that this duty of care must be integrated into the company's internal policies and risk management systems.

Principle of responsibility

The directive establishes that companies are responsible not only for their own activities, but also for those of their subsidiaries and their suppliers and business partners. This responsibility covers the entire chain of activities, from production to distribution.

For example, a European textile company must ensure that its suppliers in Asia respect fundamental workers' rights.

Principle of due diligence

Article 8 of the CSDDD Directive requires that implement specific procedures to identify, prevent, mitigate and correct negative impactsThis duty of care requires managers to anticipate risks rather than simply react once the damage has been caused.

For example, a battery manufacturer must analyze the risks associated with cobalt extraction, implement supplier audits, and establish corrective plans if human rights and environmental violations are identified.

Principle of transparency

Article 11 of the CS3D introduces the obligation to communicate publicly on their due diligence processes and to publish accessible and verifiable information. The goal is to ensure that investors, regulators, and consumers have reliable information to assess an organization's sustainable performance.

For example, a company publishes a report each year which details its vigilance actions, its progress, and the corrective measures implemented.

Principle of repair

The directive establishes a public liability : when damage is proven, companies must contribute to its repair through concrete measures or compensation.

For example, a mining company identified as responsible for polluting a river must finance the clean-up and compensate local populations.

Who is affected by the CS3D directive?

The CS3D directive concerns large European and foreign companies with a turnover exceeding 450 million euros and more than 1,000 employees. It thus broadens the scope of application of the duty of care law and concerns three categories of companies:

European companies and their parent companies with more than 1,000 employees and generating more than 450 million euros in net turnover worldwide.
Franchise networks in the EU achieving a global turnover of over 450 million euros
Companies that operate franchises or licenses in the EU are concerned as soon as they achieve more than 80 million euros in global turnover, including at least 22.5 million from royalties.

These thresholds are mentioned in Recital 28, Article 37(1)(e) and Recital 29 of the CS3D.

The directive also applies to foreign companies (non-European) which achieve a turnover in the European Union of more than 450 million eurosIn other words, even a company headquartered in North America or Asia must comply with the duty of care if it generates significant turnover in Europe.

However, Article 2 of the Corporate Sustainability Due Diligence Directive provides for an exemption. If a parent company merely holds shares in its subsidiaries, without intervening in their day-to-day management (no operational, financial, or strategic decisions), it does not have to comply with this duty of care. In this case, one of its European subsidiaries assumes all the obligations set out in the CS3D.

What are the 7 obligations of the Duty of Care Directive?

The CS3D directive imposes seven obligations on companies so that the duty of care is concrete and measurable:

Integrate vigilance into their governance,

Identify risks,

Prevent negative impacts,

Establish a complaints mechanism,

Regularly evaluate the effectiveness of the measures

Publish an annual statement.

Integrating vigilance into governance

Businesses must formalize a vigilance policy in their strategy. This involves defining a long-term approach and a code of conduct for all employees, subsidiaries and partners, correcting any violations observed, regularly monitoring their actions and publishing an annual transparency report.

Identify the risks

Each company must analyze its activities and those of its partners to detect risks related to human rights and the environmentThe CS3D requires that these risks be prioritized according to their severity and probability. For example, a technology company, is mapping data that reveals a high risk of pollution linked to the extraction of rare metals by its suppliers.

Prevent and mitigate negative impacts

Once the risks have been identified, concrete measures must be implemented to reduce them. This can be done through:

Contractual guarantees,
Audits,
Technical support to suppliers or, as a last resort,
The breakdown of a partnership.

For example, an agri-food group imposes environmental standards on its producers and finances equipment to reduce the use of pesticides.

Establish a complaints mechanism

A complaints mechanism is a system set up by the company to allow any stakeholder (employees, subcontractors, NGOs, local communities, etc.) to report violations or risks related to human rights or the environment. This system must be easy to access and must guarantee listening, transparency, and the effective processing of complaints, that is, a concrete response to the complaints received.

For example, a company is launching a multilingual platform where workers and local NGOs can report human rights violations.
Monitor and evaluate effectiveness
According to the CSDDD, companies must regularly monitor the implementation of their measures, and evaluate its effectiveness at least once a year. These evaluations cover their own activities, those of their subsidiaries and those of their business partners. This may involve internal audits, independent external audits, field surveys, or even performance indicators.

For example, an energy company mandates an external auditor to verify that the CO₂ emission reduction measures implemented by its subcontractors are properly applied.
Communicate publicly
The annual declaration is an official document in which the company reports on the vigilance actions it has implemented. It must clearly show clear, verifiable, and accessible how the company identified risks, what measures it took to prevent or correct them, and what results were achieved.
This statement may be incorporated into the sustainability report required by the CSRD, in order to avoid duplicates, be or completed by a CSR report global which values all of the company's actions. For example, an industrial group publishes on its website a report detailing its audits, corrective measures and progress in terms of working conditions.
The climate transition plan

In addition to these six obligations, the CS3D requires companies to prepare a climate transition plan aligned with the Paris Agreement. This plan must show how their economic strategy contributes to limiting global warming to +1,5°C. It includes:

To identify climate risks.
To set clear short, medium and long-term emission reduction targets.
To implement energy efficiency strategies and develop the use of renewable energies.
To invest in technological innovations to make production processes cleaner.
To adopt responsible and sustainable management of the entire supply chain.

What are the benefits of CS3D for businesses?

The CS3D helps companies better manage their risks, achieve long-term savings, and increase their attractiveness to customers, investors, and talent. It also complements the CSRD by linking transparency and concrete action.

Better risk management : The CSDDD requires companies to identify and address social and environmental risks before they become crises. This reduces the likelihood of sanctions, costly litigation, or boycott campaigns.

Long-term savings : integrating sustainable practices often leads to financial gains, such as reducing energy consumption, limiting waste production or optimizing resources.

A lever of attractiveness and confidence: Sustainability has become a key criterion for customers and investors. Demonstrating a concrete commitment through CS3D improves the company's image, attracts new markets, and builds employee loyalty.

Alignment with other European standards: The CS3D complements the CSRD by linking reporting to concrete action. Where the CSRD requires the publication of comparable and verifiable data, the CS3D requires action to prevent and correct violations. Together, the two texts create a comprehensive approach that strengthens transparency and credibility in European and international markets. Companies that already follow standards such as the PPWR, The Cradle to Cradle certification or other certifications of der Kreislaufwirtschaft will find in the Corporate Sustainability Due Diligence Directive a natural continuity to structure their commitments.

What is the timeline for implementing CS3D?

The CS3D Directive entered into force on 25 July 2024, and from that date Member States have two years to transpose the directive into their national law and put in place the necessary administrative structures.

The CSDDD will therefore come into force gradually between 2027 and 2029., depending on the size and turnover of the companies:

2027 : companies with more than 5,000 employees and a turnover of more than 1,5 billion euros (including for non-European companies exceeding this threshold in the EU).
2028 : companies with more than 3,000 employees and a turnover of more than 900 million euros.
2029 : companies with more than 3,000 employees and a turnover of more than 450 million euros.

How to prepare your company for the CS3D directive?

To prepare for CS3D, a company must anticipate its obligations as early as possible. This involves:

Anticipate the application schedule,

Identify and prioritize risks,

Involve stakeholders,

Provide appropriate resources,

Organize data collection.

Anticipate the schedule

The CS3D Directive will apply fully from July 2026, by which time EU member states must have incorporated it into their national law.. However, companies must prepare now, with some obligations that need to be anticipated in advance. These include, for example, integrating the duty of care into internal policies or preparing a climate transition plan.

Identify and prioritize risks

Identifying social and environmental risks is at the heart of CS3D. Companies must analyze their own operations, as well as those of their subsidiaries and suppliers. The goal is to identify the most critical situations (exploitation of workers, pollution, human rights violations, etc.) and classify them according to two criteria: their severity and their probability of occurrence, in order to determine priorities for vigilance efforts.

Involve stakeholders

Involving stakeholders means that the duty of care cannot be treated as a mere administrative formality. The leaders companies must be directly involved, as they define the strategy, validate the vigilance policies, and monitor their implementation.

Business partners (suppliers, subcontractors, distributors) also have a role, because they must transmit reliable information on their practices and align with the standards required by the company. Other actors, such as employees, unions, NGOs or local communities, can be consulted to better identify risks and strengthen the credibility of the system.

Provide appropriate resources

Providing appropriate means means that the duty of care cannot be limited to good intentions: it requires concrete resourcesCompanies must therefore allocate a specific budget, invest time, and mobilize specialized skills to design and monitor the measures.

This investment can be made through:

Training of existing teams,

- Recruitment of dedicated profiles (experts in compliance, sustainable development, social audit),

The creation of suitable monitoring tools to track sustainability actions, whether waste reduction, recycling or reuse raw materials.

The idea is to ensure that the vigilance policy does not remain theoretical, but that it is actually applied and coordinated on a daily basis. For example, it could involve creating a “vigilance and sustainability manager” position to coordinate actions between the legal, purchasing and CSR.

Organize data collection

Organizing data collection is essential because a company must be able to concretely prove its vigilance actions. This involves:

Define in advance what information is needed (origin of raw materials, working conditions at suppliers, CO₂ emissions),
Implement methods to ensure its reliability,
Structure their communication internally and externally.

Digital tools, such as the passports produced ou ESG reporting platforms, allow this monitoring to be automated and secured, while making the information accessible to authorities, investors or consumers.

For example, an agri-food company uses a traceability platform to track the origin of each batch of cocoa and prove that it comes from sources free of deforestation and child labor.

How is the implementation of the CSDDD monitored?

The CSDDD Directive provides for a dual control mechanism: administrative monitoring by national authorities and civil liability allowing victims to obtain compensation. This dual system aims to ensure that companies correctly implement their duty of care.

Administrative control

Each Member State must designate one or more supervisory authorities responsible for verifying the compliance of companies which may:

Conduct surveys to analyze vigilance practices,
Carry out on-site checks on company premises,
Require the provision of specific documents and information.

In the event of a breach, these supervisory authorities may:

Issue injunctions to correct deficiencies : Authorities may require a company to take immediate steps to comply. This may include reviewing internal procedures, amending contracts with suppliers, or implementing new due diligence measures.
Impose fines of up to 5% of the company's net global turnover : Financial penalties are particularly dissuasive because they are calculated on global turnover and not on European activity alone. A multinational can therefore be fined several hundred million euros if it does not comply with its due diligence obligations.
Publish the names of failing companies Beyond fines, authorities may make their decisions public. This practice of “naming and shaming” aims to create additional pressure, as a sanctioned company risks losing the trust of its customers, investors, and business partners.

Civil liability

The CS3D establishes civil liability for companies, meaning that if they do not respect their vigilance obligations, they may be held responsible for damage caused to individuals, communities or the environment:

Victims will have the right to request full compensation for the damages suffered: a person, community or even an organization affected by a company's activities may demand that the damage be repaired.
Legal action may be taken by affected individuals or groups: Victims are not solely dependent on supervisory authorities. They will be able to directly appeal to the national courts to have their rights recognized. This opens the way to class actions or complaints brought by NGOs on behalf of the affected communities.
Companies will have to prove that they took all reasonable steps to avoid the harm : The burden of proof does not rest solely on the victims. Companies will have to demonstrate that they have implemented a serious vigilance system: risk mapping, audits, preventive and corrective measures. Without this proof, they could be held liable.

This responsibility gives real legal weight to the duty of care, by allowing stakeholders to obtain direct compensation.

The CS3D directive now requires companies to anticipate social and environmental risks and demonstrate their vigilance actions.It imposes a new rigor, focused on preventing negative impacts and taking climate change into account in economic strategies.

In this continuity, ETERNITY Systems provides solutions that facilitate the tracking, control and reuse of packagingBy helping companies trace their flows, reduce their waste and automate their regulatory publications, we offer a concrete way to transform regulatory constraints into sustainability opportunities.

About the Author

Anthony ADAM

Communications and Marketing Manager at ETERNITY Systems, Anthony designs strategies and content to promote more sustainable consumption. He is a committed agent of change who combines creativity, rigor, and action to strengthen the visibility and impact of projects related to reuse and the circular economy.