The amended due diligence directive now applies only to the largest companies operating in the EU, and its start date has moved to 26 July 2029. The Omnibus I amending act, approved by the Council in February 2026 and in force since 18 March 2026, rewrote the Corporate Sustainability Due Diligence Directive after a fierce debate over competitiveness.

What changed in the due diligence directive

The 2024 text reached EU companies with more than 1,000 employees and EUR 450 million in turnover, with phased application from 2027 to 2029. The amended due diligence directive raises the bar to more than 5,000 employees and net worldwide turnover above EUR 1.5 billion. Non-EU companies fall in scope only if their EU turnover exceeds EUR 1.5 billion.

That change removes thousands of mid-sized firms from direct obligations. Member States must transpose the new rules by 26 July 2028, which leaves almost two years of national lawmaking still to come.

How penalties now work under the directive

Enforcement also changed. The earlier approach tied maximum fines to a share of net worldwide turnover. The amended text sets a uniform EU ceiling of 3 percent of net worldwide turnover and asks the Commission to issue guidance on how national authorities should set penalties.

Supporters of simplification argue that this gives companies predictability. Critics reply that a single ceiling may weaken the deterrent effect for the very biggest groups, whose turnover dwarfs that of firms the original law targeted. The guidance will therefore matter as much as the legal text.

Competitiveness gains and accountability costs

The competitiveness argument is straightforward. Fewer companies face audit-style supply-chain obligations, and information requests passed down value chains must now be necessary, targeted and proportionate. Smaller suppliers should receive fewer questionnaires from large buyers, which cuts compliance costs where resources are thinnest.

Full harmonisation of the core due diligence mechanics also reduces the risk of twenty-seven slightly different national regimes. For a company operating across the single market, one rulebook is worth more than a lighter rulebook that varies by capital. That is the strongest case for the reform.

The accountability cost is equally clear. Human rights and environmental groups note that most companies previously covered will now fall outside the due diligence directive, so the law protects workers and communities in fewer supply chains. Its civil liability rule, which requires compensation for harm from intentional or negligent failures, remains tied to a much smaller group of defendants.

What companies should watch before 2029

Three variables deserve attention. National transposition laws due by July 2028 may differ on liability procedure and supervision. Commission penalty guidance will reveal how seriously regulators intend to use the 3 percent ceiling. And large firms outside the formal scope may still adopt due diligence voluntarily, because their customers and lenders will continue to ask for it.

The policy lesson is that simplification changes who must comply before it changes what compliance means. The due diligence directive still asks the largest companies to identify and address adverse impacts across their chains. The question for 2029 is whether a narrower law delivers enough accountability to justify the competitiveness gain, and the answer will depend on enforcement more than on thresholds.