Europe Must Not Leave Corporations (yet again) in Limbo

The adoption of the revised Corporate Sustainability Due Diligence Directive (CSDDD) marked an important moment in European policymaking on corporate sustainability. After years of debate, negotiation, and compromise, the European Union established a framework requiring companies to identify, prevent, and address adverse human rights and environmental impacts in their chains of activities. Whatever one’s views on the substance of the Directive, one fact is undeniable: it is now law, and the European Commission is, by the same law, obliged to provide guidance.

The delays in the European Commission’s consultation on implementation guidance are concerning.

For many companies, especially those operating across multiple jurisdictions and complex supply chains, the Directive’s obligations must be transformed into concrete operational practices. This guidance stage will be essential for clarifying expectations and obligations in practice. Only once the European Commission fulfills its obligation to provide guidance will businesses have a clear view of what compliance will look like. Companies need to better understand what regulators will expect, how risk assessments should be conducted, what constitutes meaningful stakeholder engagement, how actual and potential impacts are to be prioritized, and undertaken due diligence measures documented.

Guidance will assist companies to implement effective sustainability due diligence. Yet, the process, which is set to be finalized by July 2027, appears to be increasingly delayed, leaving companies in a state of uncertainty at a moment when they should be preparing for application in 2029.

The costs of this delay extend beyond individual companies. The European Union has repeatedly presented itself as a global leader in sustainable and responsible business conduct. That leadership depends not only on adopting ambitious legislation but also on implementing it effectively. A regulatory framework that remains incomplete years after adoption risks undermining confidence among businesses, investors, and international partners. The CSDDD also links to other important EU measures which apply and refer to due diligence obligations, such as the Deforestation Regulation, the Forced Labour Regulation, the Batteries Regulation and the Corporate Sustainability Reporting Directive. The alignment in approach between these measures can only be achieved through guidance for the CSDDD. Such guidance will, in fact, significantly contribute to coherence between due diligence measures. Now is the time to further define the “how” and use the momentum the CSDDD has created to advance the standards for responsible business.

The Commission therefore faces an urgent task. It should prioritize the development and publication of clear, practical, and timely guidance. Such guidance need not answer every question immediately, but it must provide companies with a credible roadmap for compliance. Businesses can adapt to demanding rules. What they struggle to adapt to is uncertainty.

Europe’s sustainability agenda will be judged by its ability to translate legislative ambition into practical reality. The CSDDD is now at that critical stage. Further delays risk leaving one of the EU’s most significant sustainability initiatives in a limbo, creating uncertainty for EU businesses, investors, workers and affected communities, while failing to deliver the level playing field this Directive is intended to create.

The Directive has been adopted. Companies are preparing. What they need now is guidance, not silence.

Full letter including list of signatories attached