CSDDD: Sweden proposes minimum-level implementation of the due diligence Directive

Proposal for Swedish legislation on corporate responsibility

On 17 September 2026, the report A Corporate Responsibility Act, SOU 2026:56, was published, proposing how the EU Directive on corporate sustainability due diligence, also known as the CSDDD or the Due Diligence Directive, is to be implemented in Sweden. The proposal entails the introduction of a new Corporate Responsibility Act, with obligations relating to human rights and the environment. The implementation entails increased legal requirements for the companies covered.

“The implementation of CSDDD is an important part of companies’ efforts to integrate sustainability into their business models, as it means that procedures and processes for responsible value chains will move from being non-binding to mandatory legislation,” says Anna Berntorp, Partner and Head of Sustainability and ESG Advisory at DLA Piper in Sweden.

The legislative proposal presented in the report is still at the proposal stage and may change during the continuing legislative process.

Sweden proposes a minimum level

The report proposes that the Directive be implemented at a minimum level. The rules will therefore, in principle, apply only to the very largest companies. The inquiry estimates that approximately 70–90 Swedish companies will be directly covered.

The proposed Corporate Responsibility Act will cover companies established in Sweden that, during each of the two most recent financial years, have:

• more than 5,000 employees and net turnover exceeding EUR 1.5 billion, or
• are the ultimate parent company of a group reaching the corresponding thresholds,
• alternatively, are covered by specific thresholds for franchising or licensing agreements, including royalty income exceeding EUR 75 million and net turnover exceeding EUR 275 million.

Certain very large companies from countries outside the EU with a branch or significant turnover within the EU will also be covered. Certain holding companies may, upon application, be exempted if an EU-based subsidiary assumes the obligations and has sufficient resources and authority.

Key obligations

Companies must introduce a risk-based process for human rights and environmental due diligence. The process must cover the company’s own operations, subsidiaries and, under certain conditions, business partners in the chain of activities.

In practice, this includes requirements for the company to:

• integrate due diligence into relevant policies and risk management systems,
• have a due diligence framework and codes of conduct for the company, subsidiaries and business partners,
• identify and assess actual and potential adverse impacts in its own operations, those of subsidiaries and those of business partners in the company’s chains of activities,
• prevent, mitigate, bring to an end, minimise and, where necessary, remedy adverse impacts,
• prioritise the most severe and likely risks,
• consult relevant stakeholders,
• have procedures for complaints and notifications,
• regularly assess the effectiveness of the measures and retain documentation for five years.

If adverse impacts cannot be managed in any other way, the company may, as a last resort, need to refrain from or suspend certain business relationships, taking into account the consequences of such a decision.

Companies that are not already subject to sustainability reporting requirements must also publish an annual statement in Swedish and English on their due diligence work.

Entry into force

The proposed Act will, in principle, enter into force on 26 July 2029. The requirement for an annual statement is proposed to apply from 1 January 2030, while a further reporting-related provision is proposed to enter into force on 1 January 2031. Supervisory measures will concern infringements occurring after the respective entry into force.

Supervision and sanctions

The National Board of Trade (Sw. Kommerskollegium) is proposed to become the supervisory authority. The authority will be able to initiate investigations on its own initiative or following a notification of substantiated concerns. It will be able to issue injunctions, require infringements to be brought to an end or remedial measures to be taken, and attach a conditional fine to injunctions.

Infringements may also result in a pecuniary penalty of between SEK 5,000 and three per cent of the company’s net turnover. For ultimate parent companies, the group’s turnover will form the basis for the calculation. Decisions imposing pecuniary penalties will be published on the supervisory authority’s website and be available for at least five years.