Sustainability 2.0 in Luxembourg: CSRD, CSDDD, and the next compliance wave
The Omnibus I Directive was formally approved by the European council on February 24, 2026 and published on February 26, 2026. This will lead to major changements re the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Due Diligence Directive (CSDDD) and the Member States are given 12 months to transpose the changes into national law.
Under the revised regime, only the largest companies – broadly those with more than 1,000 employees and more than €450 million in net annual turnover – remain in scope, with first revised CSRD reports expected in 2028 for FY2027.
For many undertakings, the practical question is no longer whether sustainability matters, but how quickly the new requirements will apply and what controls must be in place before first reporting. Luxembourg companies should now reassess scope, reporting readiness, and group-level coordination in light of the revised EU framework.
Under the CSSF’s current guidance, CSRD reporting requires a dedicated sustainability section in the management report.
The CSDDD adds a separate layer of obligations for very large companies. The latest consolidated materials indicate that transposition is due by 26 July 2028, with application from 26 July 2029, after the scope was significantly narrowed by the Omnibus I amendments.
The CSDDD is risk-based and covers actual and potential human rights and environmental impacts across own operations, subsidiaries, and certain business partners. Companies in scope must integrate due diligence into policies and risk management, carry out impact assessments, take preventive or corrective action, maintain complaints mechanisms, and provide remediation where appropriate.
Luxembourg groups should begin with a scope exercise at entity and group level. They should then map reporting responsibilities, identify data owners, document internal controls, and align legal, finance, risk, procurement, and sustainability functions.
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