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CSDDDScope test

Does the amended CSDDD apply to your company?

Use the binding rules after Directive (EU) 2026/470. Older guides built around the EUR 450 million and 1,000-employee general route, lower franchise thresholds, or staggered 2027-2029 waves no longer describe current CSDDD scope.

This is an entity-and-group legal test. Supplier risk, customer requests, or voluntary OECD alignment can justify due diligence work without placing the company itself in CSDDD scope.

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Author
Sorena AI
Published
Feb 21, 2026
Updated
Jul 31, 2026
Sections
3

Structured answer sets in this page tree.

Primary sources
4

Cited legal and guidance references.

Publication metadata
Sorena AI
Published Feb 21, 2026
Updated Jul 31, 2026
Overview

Start with where the company is formed, then test , employee count where applicable, ultimate-parent treatment, exclusions, and the two-consecutive-financial-years rule. Companies that remain in scope apply national measures from 26 July 2029.

Section 1

1. Test an EU company or group

For a company formed under Member State law, the amended main route requires more than 5,000 employees on average and more than EUR 1.5 billion net worldwide turnover in the last financial year for which annual financial statements have been or should have been adopted. An ultimate parent can be tested on consolidated group figures under the parent-company route.

Both thresholds must be exceeded for each of two consecutive financial years. Scope ends only after the relevant conditions cease to be met for each of the last two relevant financial years. Do not reuse the original Directive's lower 1,000-employee and EUR 450 million test.

Calculate part-time employees on a full-time-equivalent basis. Include temporary agency workers and other non-standard workers when they meet the Court of Justice worker-status criteria, count seasonal workers in proportion to months employed, and include employees and turnover of legally dependent branches. Keep the calculation method with the conclusion.

Directive (EU) 2026/470 raised, rather than removed, the distinct franchise and licensing thresholds. The Directive does not apply to alternative investment funds (AIFs) or undertakings for collective investment in transferable securities (UCITS); a fund manager or another regulated financial undertaking can still fall within the Directive's company definition and requires its own test.

  • Identify the exact legal entity and formation law.
  • Collect average employee and worldwide net-turnover evidence for two consecutive financial years.
  • For a parent analysis, keep consolidated accounts, group structure, control, and any holding-company exemption analysis together. The exemption requires a Union subsidiary to fulfil Articles 6 to 16 on the parent's behalf with the necessary means, legal authority, information, and documents; the parent applies to the competent supervisory authority and remains jointly liable with the designated subsidiary for the subsidiary's failure.
  • Check the AIF and UCITS exclusions before assigning a CSDDD implementation owner; do not assume that an excluded fund also excludes its manager.
Sources for this answer
Directive (EU) 2026/470
Binding amendment supporting the current Article 2 scope and parent-company rules.
Consolidated Directive (EU) 2024/1760 as amended
Current source for employee calculation, the two-year entry and exit rule, AIF and UCITS exclusions, and the holding-company exemption process and liability.
Section 2

2. Test a third-country company or group

A company formed outside the EU is tested by generated in the Union, not by an EU employee threshold. The general threshold is more than EUR 1.5 billion net Union turnover in the financial year preceding the last financial year, including the relevant consolidated ultimate-parent analysis.

The threshold must be met for two consecutive financial years, and scope ends only after it has ceased to be met for each of the last two relevant financial years. Keep the turnover methodology and Member State allocation reviewable.

An in-scope third-country company must designate an established or domiciled in a Member State where it operates. The appointment becomes valid when the representative accepts it, and the company must give the representative the powers and resources needed to receive communications and cooperate with supervisory authorities.

  • Reconcile EU to audited or approved financial records.
  • Document currency conversion, eliminations, branches, and the relevant financial years.
  • Identify the group parent and whether consolidated EU turnover changes the result.
  • Separately test the retained franchise or licensing route: the Union agreements must be with independent third parties, ensure a common identity, common business concept, and uniform business methods, and produce more than EUR 75 million in Union royalties plus more than EUR 275 million turnover. Use worldwide turnover for EU companies and Union turnover for third-country companies.
Sources for this answer
Directive (EU) 2026/470
Binding source for the amended third-country threshold and related scope provisions.
Consolidated Directive (EU) 2024/1760 as amended
Current source for the two-year rule, authorised representative, and third-country supervisory-authority provisions.
Section 3

3. Separate scope from timing and indirect effects

Member States must transpose the amended Directive by 26 July 2028. National measures apply from 26 July 2029 to all companies that remain in Article 2 scope; there is no longer a separate 2028 first wave under the superseded 2025 schedule.

A company below Article 2 thresholds may still receive necessary, targeted information or contract requests from an in-scope business partner. That indirect commercial effect is not the same as direct CSDDD scope. During an Article 8 in-depth assessment, an in-scope company may request information from a partner with fewer than 5,000 employees only when it cannot reasonably obtain the information by other means.

  • Record the scope conclusion, facts, financial years, source version, reviewer, and next reassessment date.
  • Reassess after acquisitions, disposals, group restructures, large turnover changes, or employee-count changes.
  • Track national transposition because competent authorities, procedures, sanctions, and civil claims depend on national law.
  • If below scope, label voluntary or customer-driven work accurately rather than calling it mandatory CSDDD compliance.
Sources for this answer
Directive (EU) 2026/470
Current source for 2028 transposition, 2029 application, and the amended scope framework.
Original Directive (EU) 2024/1760
Original framework; use with the 2026 amendment rather than as a standalone statement of current law.

Turn the scope result into a controlled legal record

Keep entity, group, employee, turnover, exclusion, authorised-representative, timing, and reassessment evidence in one reviewed file.

Research workflow
Open Research Copilot

Connect the CSDDD decision to cited sources, owners, evidence, and reviewable implementation work.

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Next step
Open the amended CSDDD hub

Return to current scope, dates, due diligence, reporting, and enforcement guidance.

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Talk to Sorena
Discuss CSDDD implementation

Review the relevant entity, national-law dependency, evidence gap, and next control decision with Sorena.

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Primary sources

References and citations

Directive (EU) 2026/470
eur-lex.europa.eu
Referenced sections
  • Current source for 2028 transposition, 2029 application, and the amended scope framework.
Original Directive (EU) 2024/1760
eur-lex.europa.eu
Referenced sections
  • Original framework; use with the 2026 amendment rather than as a standalone statement of current law.
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