This chapter provides a comparative analysis of nine pieces of EU legislation, comprising due diligence related legislation, product and consumer legislation for the circular economy, and carbon emissions taxes. The legislation set obligations for business entities to adopt more responsible and sustainable business practices including in relation to their supply chains and/or products placed on the EU market. Whilst the legislation generally targets business entities, there are differences in the scope of businesses covered, in the supply chain coverage of the obligations and the sustainability and responsible business conduct issues the legislation addresses. The legislation embeds a range of enforcement modalities, generally requiring the designation of an enforcement body (or bodies), and setting both preventative and reactive enforcement requirements. The legislation also provides for the European Commission to develop a range of secondary legislation, guidelines, co-ordination mechanisms and other accompanying measures to support implementation and compliance. The legislation generally accounts for the impact on small and medium sized enterprises and sometimes sets provisions tailored to smaller businesses.
Developing a Responsible Business Compass for Ireland
Abstract
This chapter compares nine pieces of EU legislation that are grouped as due diligence related measures (1-5), product and consumer measures for the circular economy (6-8), and carbon emissions taxes (9):
1. EU Corporate Sustainability Due Diligence Directive (CSDDD)
2. EU Corporate Sustainability Reporting Directive (CSRD)
3. EU Regulation to prohibit products made with forced labour (EUFLR)
4. EU Regulation on Deforestation-free products (EUDR)
5. EU Batteries Regulation (EUBR)
6. EU Ecodesign for Sustainable Products Regulation (ESPR)
7. EU Empowering Consumers for the Green Transition Directive (ECGT)
8. EU Directive on common rules promoting the repair of goods (R2R)
9. EU Carbon Border Adjustment Mechanism Regulation (CBAM)
Note 1: Legislative scope identified based on preparatory work with Ireland, the European Commission and the OECD. Note 2: The OECD categorises due diligence related legislation as disclosure measures (CSRD); due diligence conduct measures (CSDDD, Batteries Regulation); and product and market-based measures (Deforestation Regulation, Forced Labour Regulation). This is elaborated in Chapter 2.
The selected EU legislation was identified by the Advisory Group of the Project for being of particular relevance for Ireland (Box 1.2). They address companies’ obligations in relation to their supply chains, with direct or indirect impacts on SMEs, and impacting businesses and supply chains operating both within and outside ethe EU (Figure 1.1). Many of the pieces of legislation listed are part of the European Green Deal, a set of policy initiatives by the European Commission with the overarching aim of making the European Union's climate, energy, transport and taxation policies fit for reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels, and climate-neutral by 2050 (EC, 2024[1]).
The nine pieces of EU legislation were mapped against pre-defined criteria of objectives pursued, regulatory scope (including types of entities, supply chains, or issues addressed), timeframes for implementation and possible sequencing, expectations and obligations by types of actors. Annex 1.A provides an overview of the relevant EU legislation, and the structure of legislative mapping is detailed in the Chapter’s Annexes.
The section and analysis below cover the following elements:
Overall objectives;
Obligations, including businesses obligations, enforcement, support measures, and third-party verification and multi-stakeholder initiatives;
Regulatory coverage (entities, supply chain, responsible business conduct issues, non-EU businesses), and provisions relating to small and medium-sized enterprises (SMEs);
Timeframes for implementation and phasing-in periods.
Each of the nine pieces of legislation contribute to the EU legislative landscape on sustainability. Their objectives are summarised below.
EU CSDDD (2024) aims to foster sustainable and responsible corporate behaviour along global value chains, by ensuring that companies in scope identify and address adverse human rights and environmental impacts of their actions inside and outside Europe.
EU CSRD (2023) aims to ensure disclosure of information on impacts, risks and opportunities arising from social and environmental issues in order to help investors, civil society organisations, consumers and other stakeholders evaluate the sustainability performance of companies.
EU Forced Labour Regulation (FLR) (2024) seeks to prohibit the placing and making available on the EU market, or the export from the EU market, of any product made using forced labour.
EU Deforestation Regulation (EUDR) (2023) seeks to promote the consumption of ‘deforestation-free’ products and reduce the EU’s impact on global deforestation and forest degradation by prohibiting the placing and making available on the EU market, or the export from the EU market, of covered commodities that are associated with deforestation or forest degradation, thereby contributing to decrease greenhouse gas emissions and biodiversity loss.
EU Batteries Regulation (EUBR) (2023) aims to ensure that batteries placed in the EU market are sustainable and safe throughout their entire life cycle – from the sourcing of materials to their collection, recycling, and repurposing, and requires economic operators to carry out supply chain due diligence.
EU Ecodesign for Sustainable Products Regulation (ESPR) (2024) sets rules to make products more sustainable by improving their circularity, recyclability, durability, repairability and energy performance by setting ecodesign requirements. It also seeks to provide consumers with sustainability information for products and make more informed decisions when purchasing goods.
Empowering Consumers for the Green Transition (ECGTD) (2024) aims to provide consumers with better information on products’ durability and reparability at the point of purchase, and help them take better-informed purchasing decisions to stimulate the market for more sustainable goods. It also strengthens consumer protection against greenwashing and early obsolescence practices.
Directive on common rules promoting the repair of goods (R2R) (2024) aims to curb premature replacement and discarding of goods, promote waste reduction and a more sustainable consumption model, and boost the repair sector.
EU Carbon Border Adjustment Mechanism (CBAM) (2023) aims to counter carbon leakages, by putting a price on the carbon emitted during the production of goods that are imported in the EU, applying similar rules to imports as those applied to domestic production through the EU emissions trading system (EU ETS).
The EU legislation sets obligations for business entities to adopt more responsible and sustainable business practices including in relation to their supply chains and/or products placed on the EU market. The legislation also set out obligations for EU Member States at national level, and the European Commission at EU level, mostly in terms of enforcement and support to be provided to businesses in this transition.
This section addresses the main obligations targeting businesses, States and the European Commission. It considers in particular the nature of their obligations, with special consideration to any due diligence-related requirements for businesses (also discussed in further detail in Chapter 2).
Business obligations
Table 1.1 presents an overview of the business obligations and the scope of applications for the nine legislative measures. Table 1.2 presents a synthesis of the type of business obligations each measure entails. More detailed analysis is provided in the following sections and Annexes 1.A to 1.E. Table 1.2 in particular helps identify where the different measures could create cumulative or overlapping obligations for enterprises.
Note: B2B – business-to-business; B2C – business-to-consumer
Note: The Forced Labour Regulation does not impose direct obligations for businesses. These obligation categories are further defined in Box 3.4.
The business obligations of the EU legislation are summarised as follows:
EU CSDDD (2024): requires companies in scope to carry out human rights and environmental due diligence for impacts associated with their own operations, those of their subsidiaries, and those of in-scope business partners; and publicly report on their due diligence, with reporting requirements aligned as appropriate with the European Sustainability Reporting Standards (ESRS, see below). Entities already reporting under the ESRS are not required to report additionally under CSDDD.
EU CSRD (2023): requires companies in scope to report according to European Sustainability Reporting Standards (ESRS) and requires independent assurance of the sustainability information that companies report on.
EU Forced Labour Regulation (2024): prohibits economic operators in scope from placing or making available on the Union market products made from forced labour; and exporting products made from forced labour, including those made within the EU as well as imported goods.
EU Deforestation Regulation (2023): requires economic operators to carry out specific aspects of due diligence to ensure that products do not originate from recently deforested land or have contributed to forest degradation, through collection of information, risk assessment measures, risk mitigation measures and detailed traceability requirement and submission of information through a due diligence statement; and prohibits the placing and making available on the EU market, or the export from the EU market, of covered commodities that are associated with deforestation or forest degradation.
EU Batteries Regulation (2023): requires economic operators to carry out supply chain due diligence and introduces waste management obligations, sustainability and safety requirements; and labelling, marking and information requirements.
EU Ecodesign for Sustainable Products Regulation (2024): requires businesses to design or re-design products to comply with ecodesign requirements; ensure data collection, proper labelling and technical documentation for information disclosures; and conduct verification processes for compliance throughout their supply chain.
Empowering Consumers for the Green Transition (ECGTD) (2024): requires traders to provide consumers with pre-contractual (pre-sale) information regarding product durability, reparability, and software updates; regulates environmental claims for greater clarity and verifiability; and prohibits unfair and misleading practices.
Directive on common rules promoting the repair of goods (R2R) (2024): sets obligations on manufacturers to ensure their products can be repaired for a reasonable price and within a reasonable timeframe, including providing repair information, ensuring the availability of spare parts, and offering repair services.
EU Carbon Border Adjustment Mechanism (CBAM) (2023): requires EU importers of CBAM goods to register as an “authorised CBAM declarant”; declare the volume of their imports and greenhouse gas (GHG) embedded; and pay import tax via CBAM certificates to correspond to the GHG emissions embedded in imports.
Focusing on the five pieces of legislation that introduce due diligence related requirements, obligations are broadly categorised across three types: (i) corporate disclosure measures; (ii) due diligence conduct measures; and (iii) product and market-based measures that integrate due diligence expectations. These are addressed in more detail in Chapter 2.
The due diligence-related legislation all expect regulated entities to publicly disclose information on their due diligence activities, either directly or indirectly. This generally takes the form of public annual reporting on due diligence at an entity level (see Annex 1.B). Certain due diligence-related legislation also requires entities to disclose specific information directly to competent authorities and to provide information at a product level publicly or to authorities.
The EU Batteries Regulation is distinct in requiring both entity level public reporting, as well as product level disclosures, aspects of which are available to the public and aspects of which are only available to the Commission and national authorities.
The EU CSRD (2023) has the most comprehensive disclosure requirements. The specific requirements are set out through the European Sustainability Reporting Standards (ESRS). A simplified draft of the ESRS has been submitted to the Commission and is anticipated for adoption in April 2026.1
In addition to public disclosure requirements, entities also have to disclose certain information directly to authorities (see Annex 1.B). This sometimes serves as a compliance check – requiring entities to submit the reports they have published to national authorities (e.g. reporting under the EU CSRD (2023)). However, in some cases, entities have to disclose information directly to authorities in addition to their public disclosures (e.g. certain aspects of battery passport under the EU Batteries Regulation (2023)).
State enforcement and guidance obligations
At member state level, the EU legislation embeds a range of enforcement modalities, generally requiring the designation of an enforcement body (or bodies), and setting enforcement requirements, from preventative actions through monitoring, to reactive measures through investigation, to sanctions through penalty regimes (Box 1.1.). Enforcement bodies at member state level are also called to co-operate, e.g. on information exchange, or can play a consultative role in support initiatives. Cross-country differences in enforcement and sanctions could however appear, when Directives are translated into domestic laws and modalities are defined locally (CSDDD, CSRD, ECGT, R2R).2 Various forms of co-operation networks among authorities are foreseen. Cross-border and EU co-operation will ensure co-ordinated enforcement across Member States. For more detail, see Annex 1.D.
The nine pieces of EU legislation embed a range of enforcement modalities, generally requiring the designation of an enforcement body (or bodies) that is then required to carry out enforcement functions and institute relevant sanctions in cases of non-compliance.
Enforcement/supervision bodies
Each of the due diligence-related measures require Member States to designate a supervisory authority or authorities for the implementation of the measure. Whilst the type of authority is generally not specified, the required functions are outlined. In the EU Forced Labour Regulation (2024), the EU Deforestation Regulation (2023) and the EU CBAM (2023), customs authorities are specifically involved in enforcement. For the EU Batteries (2023) and Ecodesign for Sustainable Products (2024) regulations, or for the EU ECGT (2024) and Right to Repair (R2R) (2024) directives, market surveillance and consumer protection authorities are responsible.
The EU legislation also encourages co-operation and exchange of information between authorities of different States, and between States and the European Commission.
Enforcement actions
Some of the legislation requires supervisory authorities to undertaken preventative actions to avoid non-compliance, through monitoring and checks. Under the EU Deforestation Regulation (2023), authorities are required to carry out checks on a specified percentage of operators and traders, depending on the risk category of the country of origin of the commodity.1 The Right to Repair Directive requests Member States to set the conditions and manage the registration of repairers in their territory.
Certain legislation contains reactive requirements for Member States to undertake investigations where there are concerns of non-compliance, with investigations taken both on the authority’s own initiative or when a concern has been raised by a third party. The EU CSDDD (2024), EU Forced Labour Regulation (2024) and the EU Deforestation Regulation (2023) each provide for authorities to receive and assess” substantiated concerns” from third parties. The EU Forced Labour Regulation (2024) and the EU Deforestation Regulation (2023) define such concerns being based on objective and verifiable information (and “factual” in the case of the Forced Labour Regulation).2 The EU CSDDD (2024) does not define the term.
The legislation also require Member States to provide for a system of administrative penalties, which includes fines. The EU CSDDD (2024) and the EU Deforestation Regulation (2023) provide guidance on thresholds for fines. In cases of non-compliance, the system of administrative enforcement empowers (but does not force) supervisory authorities to impose other forms of penalties in addition to fines.
Finally, Member States often have a consultative or supporting role on implementing guidance and other accompanying measures, such as a requirement to collaborate with the single helpdesks established under CSDDD (see 1.3.2).
Special cases
The EU Batteries Regulation (2023) is distinct in requiring the designation of independent conformity assessment bodies (known as notified bodies) tasked with determining whether the requirements of the regulation have been fulfilled.3 These bodies are not State agencies, but third-party bodies that apply to be notified as conformity assessment bodies by a State mandated notifying authority.4 The notifying authority is in turn tasked with assessing, monitoring and notifying the Commission of conformity assessment bodies that fulfil this purpose.5 The measure sets out the requirements that conformity assessment bodies must meet, the process for application to become a conformity assessment body and their operational obligations, and requires that States ensure there is an appeal procedure against decisions of these bodies.6
While the Omnibus I removes the harmonised EU liability conditions, the EU CSDDD (2024), as amended, still requires Member States to ensure that companies can be held liable for non-compliance with due diligence duties, and to ensure victims' right to effective remedies and compensation.
A detailed overview of the enforcement requirements of each measure is set out in Annex 1.D.
Notes: (1) EU Deforestation Regulation 2023/1115: Article 16(9); (2) EU Deforestation Regulation 2023/1115: Article 2(31); EU Forced Labour Regulation 2024/3015: Article 2(16); (3) EU Batteries Regulation 2023/1542: Chapter V; (4) EU Batteries Regulation 2023/1542: Article 22, 25, 28; (5) EU Batteries Regulation 2023/1542: Article 22; (6) EU Batteries Regulation 2023/1542: Chapter V.
The EU legislation may also come with some obligations for national Member States to establish administrative frameworks for assisting, guiding or supporting businesses, in order to ease compliance. In most cases, the assistance is informational or procedural to enable understanding and operability of obligations. It is not financial as EU legislation does not aim to support implementation or costs (Table 1.3).
Notes: (1) The CSDDD sets obligations for the European Commission to establish EU-level guidance and co-ordination tools, and to inform and support EU Member State authorities in implementation (Article 19). Member States are requested to set up dedicated websites, platforms or portals, to provide information and support to businesses, with specific considerations to SMEs (Article 20). The Commission may complement Member State support measures and shall issue guidance in collaboration with Member States.
European Commission obligations
At EU level, the new legislation provides for the European Commission to develop a range of secondary legislation, guidelines, reporting standards, co-ordination mechanisms and other accompanying measures to support implementation and compliance (Box 1.2).
Delegated acts under the EU CSRD (2023) set out in detail the relevant reporting standards, whilst the EU CSDDD (2024) plans for targeted delegated acts that will set out specific reporting requirements, relevant for those companies in scope of CSDDD, but not of CSRD (to be aligned as much as possible with European Sustainability Reporting Standards).1 The EU Batteries Regulation (2023) provides for a range of delegated and implementing acts, including some related to the due diligence obligations.2 Annex 1.F contains a breakdown across all measures.
Likewise, as part of the EU Ecodesign for Sustainable Products Regulation (2024), the European Commission will develop the technical and data standards of the Digital Product Passports and manage a central registry to store the unique identifiers in a secure way. By the same token, the European Commission hosts and maintains an EU-wide central CBAM Registry for reporting GHG emissions data and managing authorised CBAM declarant entries. The European Commission is also mandated through the ECGT (2024) to create a standardised information framework including a label for commercial guarantees of durability and a notice on legal guarantees of conformity.
The legislation also includes a wide number of support measures, with extensive requirements under the EU CSDDD (2024) and EU Forced Labour Regulation (2024). Both mandate a role for the Commission in the provision of information, including the establishment of a single helpdesk for information and guidance,3 and a database of information to help identify forced labour risks in specific geographic areas or with respects to specific products or product groups.4 The EU Deforestation Regulation (2023) sets out a role for the Commission and Member States in providing technical assistance and guidance to operators, as well as co-operation with third countries.5 The EU R2R Directive (2024) foresees the European Commission to establish an online platform as a central place for consumers to locate repair providers, access repair information, and compare services. In turn, repairers will be provided with a standardised European Repair Information Form to report information about their services. Both EU CSDDD and Forced Labour Regulation also provide for development of a range of guidelines to assist entities in fulfilling their obligations and to guide enforcement authorities and other relevant stakeholders.
The legislation introduces multi-stakeholder co-ordination mechanisms, involving States, industry, civil society and other national bodies (e.g. standardisation). Both the EU CSDDD (2024) and EU Forced Labour Regulation (2024) mandate the creation of networks of representatives of competent authorities across the Member States. Under the EU Forced Labour Regulation (2024), this network is designed to streamline enforcement,6 whilst under the EU CSDDD (2024) the network has a broader remit facilitating ”co-ordination and alignment of regulatory, investigative, sanctioning and supervisory practices of the supervisory authorities and, as appropriate, the sharing of information among them”.7 The EU Batteries Regulation (2023) provides for a sectoral co-ordination group of conformity assessment bodies that perform functions including testing, certification and inspection.8 The Ecodesign for Sustainable Products Regulation (ESPR) (2024) established an Ecodesign Forum to support a consultation process on delegated acts, technical standards and assessment, reporting format and ecodesign requirements.
Notes: (1) EU Corporate Sustainability Due Diligence Directive 2024/1760: Article 16(3); (2) For a breakdown, see slides 7, 8: https://thebatterypass.eu/wp-content/uploads/BatteryPass_Delegated-and-Implementing-Acts-following-Battery-Regulation.pdf; (3) EU Corporate Sustainability Due Diligence Directive 2024/1760: Article 21; (4) EU Forced Labour Regulation 2024/3015: Article 8 ; (5) EU Deforestation Regulation 2023/1115: Articles 15, 30; (6) The EU Corporate Sustainability Due Diligence Directive 2024/1760 defines third-party verification as ‘verification of the compliance by a company, or parts of its chain of activities, with human rights and environmental requirements resulting from this Directive by an expert that is objective, completely independent from the company, free from any conflicts of interest and from external influence, has experience and competence in environmental or human rights matters, according to the nature of the adverse impact, and is accountable for the quality and reliability of the verification (Article 3(1)(h)) and defines industry or multi-stakeholder initiatives as ‘a combination of voluntary due diligence procedures, tools and mechanisms, developed and overseen by governments, industry associations, interested organisations, including civil society organisations, or groupings or combinations thereof, that companies may participate in in order to support the implementation of due diligence obligations’ (Article 3(1)(j)); (7) EU Corporate Sustainability Due Diligence Directive 2024/1760: Article 28; (8) EU Batteries Regulation 2023/1542: Article 37 sets out co-ordination requirement for notified bodies, defined as conformity assessment bodies at Article 3(1)(40-41);
Third party verification and multi-stakeholder initiatives
The nine pieces of EU legislation vary in how they approach the role of third-party verification, certification, assurance, industry initiatives and multistakeholder initiatives, with differences in approach, roles and levels of specificity.3 Some measures do not explicitly refer to third party initiatives.
Some measures formally recognise a role for accredited or independent third parties for monitoring, verifying or supporting compliance. For example,
The CSRD requires the audit of sustainability reports by the auditor of the companies financial statements or another qualified auditor or independent assurance service provider.
The EU Carbon Border Adjustment Mechanism (CBAM) (2023) adopts a strict model of third-party verification and makes it mandatory for “independent, accredited verifiers” to certify the embedded emissions of imported goods.
Under the EU Batteries Regulation and the EU ESPR, Member States are required to notify the European Commission of notified bodies, i.e. bodies authorised to carry out conformity assessment tasks.4
Other pieces of legislation introduce more flexible approaches, leaving businesses to understand the relevance and credibility (or fitness) of the third-party initiatives they use. The EU CSDDD foresees the possibility for companies to participate in industry and multi-stakeholder initiatives or use third-party verification, to the extent they are “appropriate” to support their due diligence obligations. The EU CSDDD also requires entities to evaluate the effectiveness of activities carried out through initiatives.5 To support companies, the Commission must issue guidance setting out fitness criteria and a methodology for assessing the fitness of industry and multi-stakeholder initiatives, and third-party verifiers, and guidance for monitoring the “accuracy, effectiveness and integrity of third-party verification”. It also makes clear that companies retain ultimate responsibility for their own due diligence and so avoids de-facto safe harbours from liability; companies that participate in initiatives can still be penalised or found liable for violations under the law.
The EU Deforestation Regulation (2023) takes a flexible approach to the role of initiatives, somewhat similar to CSDDD. The measure allows information from certification or third-party verification schemes to be taken into account in the risk assessment and the Commission has published a Guidance Document with guidance on the role of certification and third-party verification schemes and how economic operators can assess them.
Finally, some legislation does not incorporate any provision for third-party verification, certification or multistakeholder initiatives, instead relying solely on administrative enforcement. This is the case for the EU Empowering Consumers Directive and the EU Right to Repair Directive.
The EU legislation targets business entities, but may differ based on their sector of operations, their position in specific supply chains, or the type of commodities they trade, their location, or the business size (based on revenue and/or employee numbers), or a combination of all (Table 1.1). Economic operators include both natural and legal persons. Some measures apply specifically to companies rather than all economic operators or business undertakings (e.g. limited liability companies).
This section examines entity scope, supply chain scope and issue scope in turn. An overview of entity scope and supply chain scope per piece of legislation can be found in Annex 1.A; issue scope is set out in Annex 1.C.
Entity scope
Some legislation applies to all economic operators, although in some cases implementation is subject to phase-ins (see Figure 1.4 below). Other pieces limit entity scope by legal form (e.g. limited liability companies), commodities or products, or by entity size (based on revenue and/or turnover thresholds).
The EU Forced Labour Regulation (2024) applies to all economic operators placing, making available on or exporting products from the Union market, regardless of size, sector or commodity.6
The EU Deforestation Regulation (2023) and Batteries Regulation (2023) apply to operators, regardless of size, who place, make available or export specific commodities or products on the EU market. The scope is therefore narrower than the EU Forced Labor Regulation. The EU Batteries Regulation (2023) distinguishes due diligence requirements based on size of entity.7
The EU CSDDD (2024) and EU CSRD (2023) apply to companies rather than economic operators and take a sector agnostic approach, with scope defined in relation to entity size (determined by revenue and employee numbers), although the two measures use different thresholds.8
The EU CBAM applies to all importers of relevant goods; however, it includes an exemption for entities importing less than 50 tonnes of goods subject to CBAM annually.9
The EU ESPR, R2R and ECGT apply to all economic operators involved in placing regulated products on the EU market. SMEs are subject to the same obligations as large firms for these three measures-, with graduated responsibilities depending on their role in their supply chains.
Supply chain scope
Some EU legislation sets out requirements in relation to an entity’s supply chain, with differences in supply chain scope, terminology used and whether and how the relevant supply chain coverage of the requirements are defined (Figure 1.2). In all cases, entities’ own operations are covered and across most cases, the upstream supply chain. Downstream is covered varyingly. In some cases, both downstream and upstream activities are covered; in others the supply chain is defined only in relation to upstream activities.
Note: Tick marks indicate where the legislative measures address relevant corporate activities. Grey marks signal where they partially address them.
Looking at the due diligence related legislation, the EU CSRD (2023) has the most comprehensive supply chain scope, applying due diligence reporting requirements to the full “value chain” and encompassing both upstream and downstream risks and impacts.10 The EU CSDDD (2024) introduces a new concept of the “chain of activities” which encompasses upstream activities related to the production of goods or provision of services, and downstream activities related to the distribution, transport and storage of products (where they are carried out for or on behalf of the company). The measures exclude from the definition downstream activities relating to product disposal and the services of the company.11 The EU Forced Labour Regulation (2024) uses the term supply chain and defines it with reference only to upstream activities12. The EU Deforestation Regulation (2023) also refers to the supply chain throughout the text of the regulation but does not define it. The EU Batteries Regulation (2023) introduces requirements across the life cycle of batteries made available on the EU market, with due diligence requirements related to the upstream activities of the battery supply chain (up to manufacturing).13
Looking at the non-due diligence related legislation, some measures apply to selected sectors, supply chain segments or products, and firms operating in or within those. The EU Empowering Consumer Directive (ECGT) (2024) applies to all products traded in the EU, and primarily targets business-to-consumer (B2C) transactions, i.e. products aimed at final consumers. However, enterprises engaged upstream in business-to-business (B2B) transactions are indirectly affected as they must comply with the new requirements when supplying their products and services. The EU Right to Repair Directive (R2R) (2024) only applies to products subject to the reparability requirements (e.g. TVs, smartphones, servers and data storage products, electronic displays, household appliances goods incorporating light means of transport batteries, etc.). Requirements fall on product manufacturers, with expected impact downstream and upstream on the supply chains, i.e. product manufacturers for ecodesign and compliance, manufacturers and suppliers of spare parts, repair services providers, distribution networks and reverse logistics to distribute spare parts and collect and manage returns. The Ecodesign for Sustainable Products Regulation (ESPR) (2024) will be applicable to certain categories of products, or product groups, placed on the internal EU market, and primarily target manufacturers who bear the core compliance obligations as they are responsible for designing and producing these goods. However, responsibility for compliance is also transferred to the upstream and downstream stages of the supply chain, such as importers, distributors and retailers (e.g. for gatekeeping, labelling, or due care and co-operation with authorities).
The non-due diligence related legislation can also apply to specific sectors or products, and firms operating in those or with those. The CBAM (2023) covers the import of certain cement, iron and steel, aluminium, fertilisers, electricity, and hydrogen products, as carbon-intensive basic materials at the upstream end of the value chains. The regulation also targets a narrow set of downstream products, closely linked to in-scope materials, such as some iron- or steel-made tubes or pipes.
Scope of environmental, social and human rights impacts covered
The scope of RBC issues addressed by the EU legislation varies, but can broadly be grouped as human rights, labour rights and environmental impacts. Corruption, integrity and other governance-related impacts are generally not a focus of the measures, although under the EU CSRD (2023) entities are required to disclose information on business ethics and corporate culture, including anti-corruption and anti-bribery (Article 29b(2)(b)).14
The EU CSRD (2023), CSDDD (2024) and Batteries Regulation (2023) define the scope of RBC issues with reference to specific international human rights and labour rights treaties and declarations, and multilateral environmental agreements (Figure 1.3).
The EU Forced Labour Regulation (2024) is narrower in its focus, looking only at forced labour as defined in ILO Conventions. The EU Deforestation Regulation (2023) is distinct in not referring to international treaties as a basis for risk definitions, defining deforestation directly in the text based on internationally-backed definitions and the work of the FAO to define what is to be considered a “forest” or “deforestation.15 Under this regulation, commodities and products must be produced in accordance with relevant legislation of the country of production, defined as including environmental protections, human rights and labour rights.
Note: Tick marks indicate where the legislative measures encompass each RBC issue, through reference to treaties, declarations, or multilateral agreements. Grey marks signal where measures are more limited in scope, or without reference to international treaties. IR refers to Industrial Relationships.
EU legislation and non-EU businesses
The EU legislation applies to both EU and non-EU business entities that operate in the Single Market, with some variations. The EU CSRD (2023) and the EU CSDDD (2024) each set turnover thresholds at which their requirements apply to non-EU companies. The turnover represents the criterion establishing the territorial connection with the Union territory and the applicable legislation. The EU Forced Labour, Deforestation, Batteries, and Ecodesign for Sustainable Products Regulations, as well as the Empowering Consumers Directive, cover any entity placing, making available and in some cases exporting from the Union market. The requirements would therefore apply to entities headquartered outside the EU, but seeking to place goods on the Union markets, irrespective of their turnover.16 In the case of the EU Right to Repair Directive (R2R), if a manufacturer is established outside the EU, the obligation to repair falls on its authorised representative within the EU. For the CBAM, the regulation applies to listed goods originating in a third country that are imported into the EU, with certain exceptions.17
Provisions relating to SMEs
The EU legislation considers the impact on SMEs and sets provisions tailored to smaller businesses, although in different ways. For example, some measures include exemptions or lighter requirements for SMEs; others set out specific support measures and/or phase-in periods. The EU legislation also often aims to introduce some proportionality in enforcement.
Table 1.4 provides an overview of where the EU legislation introduces differential obligations for SMEs, requirements for the Commission or competent authorities to consider SMEs in support measures; and requirements for entities in scope to support SMEs. The different provisions are detailed further in Annex 1.E.
Some measures exclude SMEs from direct obligations. This is the case for the EU Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD).
Where SMEs are in scope, the EU legislation takes into account their specificities and generally impose lighter requirements or rely on the concept of proportionality. Under the EU Deforestation Regulation (2023), SMEs are not required to exercise due diligence when this has already been done by an upstream operator and the requirements for checks on SME traders are lighter than on non-SME traders. The EU Batteries Regulation (2023) sets a net turnover threshold for the entirety of the due diligence obligations, effectively exempting most SMEs from the regulation’s due diligence requirements.18 The EU CSRD (2023) imposes a cap on information that reporting entities may request from entities in their value chain with less than 1 000 employees, whilst the EU CSDDD expects companies to use ‘reasonably available information’ and introduces a cap on information requests to business partners with fewer than 5 000 employees.19 In addition, the European Commission has adopted a recommendation on a voluntary reporting standing for SMEs, developed by EFRAG.20.
In some cases, the EU legislation does not exempt SMEs from sustainability and RBC obligations, but mandates supportive measures. The EU Ecodesign for Sustainable Products Regulation (2024) imposes the same reporting and management requirements to SMEs (by 19 July 2030), leaving yet the possibility for delegated acts to take SME interests into account in line with the proportionality principle (e.g. considering feasibility, burden and cost impact), and requesting support measures to be implemented (such as guidance, or access to standards and digital infrastructure). The EU Carbon Border Adjustment Mechanism (CBAM) (2023) does not exempt SME importers either, but allows them to benefit from simplified procedures and reduced verification burden during the transitional phase. The EU Empowering Consumers Directive (2024) and the EU Right to Repair (R2R) (2023), while not explicit on SME exemptions, call for enforcement authorities to be proportionate and take business size into account in their operations, for the former, and stresses the need to maintain an access to parts and information for independent repairers, likely SMEs, for the latter.
Timelines for implementation and phasing-in periods
The nine pieces of EU legislation considered were adopted between 2023 and 2024, with most obligations across all measures to be fully applicable by 2030, and further phasing in of the EU Carbon Border Adjustment Mechanism through to 2034. The four directives must also be transposed into the domestic legislation of the EU Member States. Figure 1.4 presents an overview of implementation timeframe, with more detail available in Annex 1.A.
Implementation timelines are generally phased along three main criteria and rationale:
Easing the transition for smaller businesses: obligations may differ according to the size of businesses (entities in scope), in order to allow more time for preparation for smaller ones. The Ecodesign for Sustainable Products Regulation (ESPR) bans the destruction of unsold consumer products and imposes disclosures obligations on discarded consumer products annually to large firms. This requirement will extend to medium sized enterprises by 19 July 2030.
Sequencing the obligations: The EU Batteries Regulation (2023) introduces phasing based on different areas of obligation within the regulation.
Targeting high-impact business activities first: The Ecodesign for Sustainable Products Regulation introduces the Digital Product Passports, to come into force in July 2027, starting with textiles, furniture, mattresses or tyres, to be progressively implemented for most products to be covered by 2030. The CBAM, during the transitional period to 31 December 2025, imposes reporting obligations to importers in sectors with high carbon emissions and high risks of carbon leakage. This transitional phase serves as a pilot and learning period to potentially expand coverage by 2030, in order to include over half of emissions in the EU ETS sectors by the full phase-in of CBAM in 2034.
Note: Graphic shows phasing in of requirements and entry into force. Directives must also be transposed into domestic legislation of Member States.
Notably, the timelines for a few of these pieces of legislation have been changed following their original adoption:
In December 2024, a one-year postponement of application of the EU Deforestation Regulation (2023) was adopted.21
In April 2025, the ‘stop the clock’ directive (as part of the Omnibus package) was approved, postponing reporting requirements for large companies that had not yet started reporting and for listed SMEs by two years under the EU CSRD (2023); and by one year the transposition deadline and first phase of application of the EU CSDDD (2024);22 and in December 2025, agreement was reached under the Omnibus package, amending implementation timeframes (see Annex 1.A, below).
In May 2025, the Commission issued a proposal to amend the EU Batteries Regulation (2023), postponing the due diligence obligations by two years, from August 2025 to August 2027 and postponing the issuing of due diligence guidance from February 2025 to July 2026.23
References
[1] EC (2024), Eurpean Green Deal, https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal_en.
Note: (1) Combined nomenclature, see: https://taxation-customs.ec.europa.eu/customs-4/calculation-customs-duties/customs-tariff/combined-nomenclature_en
Notes: (1) See 5.14, Frequently Asked Questions, Implementation of the EU Deforestation Regulation, Version 4 – April 2025:’As 2026 will be the first year for which the EUDR applies, the first report (covering the year 2026) will have to be published after 30 December 2026’, available at: https://circabc.europa.eu/ui/group/34861680-e799-4d7c-bbad-da83c45da458/library/e126f816-844b-41a9-89ef-cb2a33b6aa56/details?download=true; (2) For more information, see 5.19, Frequently Asked Questions, Implementation of the EU Deforestation Regulation, Version 4 – April 2025, available at: https://circabc.europa.eu/ui/group/34861680-e799-4d7c-bbad-da83c45da458/library/e126f816-844b-41a9-89ef-cb2a33b6aa56/details?download=true.
Notes: (1) EU Batteries Regulation 2023/1542: Article 3(1)(39-41) ; (2) Directive 2004/109/EC; (3) Directive 2013/34/EU.
Notes: (1) For a full list of delegated acts and implementing acts, see: https://thebatterypass.eu/wp-content/uploads/BatteryPass_Delegated-and-Implementing-Acts-following-Battery-Regulation.pdf; (2) Combined nomenclature, see: https://taxation-customs.ec.europa.eu/customs-4/calculation-customs-duties/customs-tariff/combined-nomenclature_en.
← 2. Under revisions to the CSDDD through the Omnibus process, the maximum harmonisation clause has expanded, covering Article 6, 8, 9, 10(1-5), 11(1-6), 14, 15, 16 reducing potential for variance across Member States.
← 3. The EU Corporate Sustainability Due Diligence Directive 2024/1760 defines third-party verification as ‘verification of the compliance by a company, or parts of its chain of activities, with human rights and environmental requirements resulting from this Directive by an expert that is objective, completely independent from the company, free from any conflicts of interest and from external influence, has experience and competence in environmental or human rights matters, according to the nature of the adverse impact, and is accountable for the quality and reliability of the verification (Article 3(1)(h)) and defines industry or multi-stakeholder initiatives as ‘a combination of voluntary due diligence procedures, tools and mechanisms, developed and overseen by governments, industry associations, interested organisations, including civil society organisations, or groupings or combinations thereof, that companies may participate in in order to support the implementation of due diligence obligations’ (Article 3(1)(j)).
← 4. EU Batteries Regulation 2023/1542: Chapter V; EU ESPR 2024/1781: Chapter IX.
← 5. EU Corporate Sustainability Due Diligence Directive 2024/1760: Article 20(4).
← 6. EU Forced Labour Regulation 2024/3015: Article 2(9). The definition of ‘economic operator’ includes any natural or legal person or association of persons placing or making available produces on the Union market or exporting products.
← 7. EU Batteries Regulation 2023/1542: Article 47.
← 8. Both laws also apply to parent companies of groups that, on a consolidated basis, meet the thresholds set out in the laws.
← 9. This is expected to exempt 182 000 importers, mostly SMEs and individuals. See: https://taxation-customs.ec.europa.eu/news/officially-published-simplifications-carbon-border-adjustment-mechanism-cbam-2025-10-20_en#:~:text=Companies%20importing%20less%20than%2050,99%25%20of%20emissions%20in%20scope.
← 10. EU Corporate Sustainability Reporting Directive 2022/2464: Article 19(2)(f)(ii).
← 11. EU Corporate Sustainability Due Diligence Directive 2024/1760: Article 3(1)(g) “(i) activities of a company’s upstream business partners related to the production of goods or the provision of services by that company, including the design, extraction, sourcing, manufacture, transport, storage and supply of raw materials, products or parts of products and the development of the product or the service; and (ii) activities of a company’s downstream business partners related to the distribution, transport and storage of a product of that company, where the business partners carry out those activities for the company or on behalf of the company, and excluding the distribution, transport and storage of a product that is subject to export controls under Regulation (EU) 2021/821 or to the export controls relating to weapons, munitions or war materials, once the export of the product is authorized”.
← 12. EU Forced Labour Regulation 2024/3015: Article 2(8) defines the supply chain as: “the system of activities, processes and actors involved at all stages upstream of a product being made available on the market, namely the extraction, harvesting, production and manufacturing of a product in whole or in part, including in the working or processing related to the product at any of those stages”.
← 13. EU Batteries Regulation 2023/1542: Article 3(1)(42) for definition of battery due diligence.
← 14. Under the EU CSDDD (2024), corruption and governance impacts are covered to the extent they reach the level of a human rights impact. See also recital 36 and Article 36(2)(d).
← 15. EU Deforestation Regulation 2023/1115: Article 3(3).
← 16. The EU Batteries Regulation contains a turnover requirement for the due diligence obligations specifically – discussed below in Provisions for SMES.
← 17. EU CBAM Regulation 2023/956: Article 2; Annex 1 for listed goods.
← 18. EU Batteries Regulation 2023/1542: Article 47.
← 19. EU CSDDD : Article 8(2-3).
← 20. https://finance.ec.europa.eu/publications/commission-presents-voluntary-sustainability-reporting-standard-ease-burden-smes_en.
← 21. See: https://www.consilium.europa.eu/en/press/press-releases/2024/12/18/eu-deforestation-law-council-formally-adopts-its-one-year-postponement/#:~:text=On%2016%20October%202024%2C%20the,of%20the%20EU%20deforestation%20regulation.
← 22. See Council press release here: https://www.consilium.europa.eu/en/press/press-releases/2025/04/14/simplification-council-gives-final-green-light-on-the-stop-the-clock-mechanism-to-boost-eu-competitiveness-and-provide-legal-certainty-to-businesses/ .
← 23. See Regulation 2025/1561: http://data.europa.eu/eli/reg/2025/1561/oj