In a major shakeup to businesses’ obligations relating to human rights, environmental standards and climate change, the Corporate Sustainability Due Diligence Directive (CS3D) is set to become law. In this article, we focus on the climate-related obligations enshrined in the CS3D: the obligation imposed on companies to adopt and put into effect climate transition plans.

As part of the European Union (EU)’s European Green Deal, one of the areas of EU law that has developed most rapidly and profoundly is that relating to corporate sustainability governance. Most recently, the Corporate Sustainability Due Diligence Directive (“CS3D”), has been provisionally agreed at a political level in December 2023, and confirmed by COREPER in a revised version in March 2024. The final text of the CS3D must still be formally adopted by the European Parliament and the Council of Ministers before it enters into force.