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Glossary termPublished inCSDDD

Business partner

What does "Business partner" mean under the CSDDD?

An entity:

  • (i) with which the company has a commercial agreement related to the operations, products or services of the company or to which the company provides services pursuant to point (g) (‘direct business partner’)
  • (ii) which is not a direct business partner but which performs business operations related to the operations, products or services of the company (‘indirect business partner’)

Defined in / by

Last updated: 13 October 2026.

Direct and indirect partners

The Directive sorts business partners into two groups. A direct business partner is an entity with which the company has a commercial agreement related to its operations, products or services, or an entity to which the company provides services within the downstream reach of the chain of activities. An indirect business partner has no such agreement with the company but performs business operations related to the company's operations, products or services.

The split matters because the Directive handles the two groups in separate paragraphs. Article 6(2), point (e), as replaced by Directive (EU) 2026/470, refers to contractual assurances from a direct business partner (Articles 10(2), point (b), and 11(3), point (c)) and, separately, from an indirect business partner (Articles 10(4) and 11(5)).

The word entity is wider than company, and the definition does not ask whether the partner is itself in scope of the Directive. A smaller supplier is therefore a business partner of a company in scope without being bound by the Directive. Directive (EU) 2026/470 wrote that fact into the definition of risk factors: whether the business partner is not a company covered by this Directive or by other comparable mandatory sustainability due diligence legal acts.

Questions and answers

Is a company's own subsidiary a business partner?

No. The Directive treats subsidiaries and business partners as separate groups: Article 15, as replaced, lists them separately, and point (e) defines subsidiary on its own.

Does a business partner have to be inside the EU?

The definition sets no territorial test. It speaks of an entity and does not require establishment in the Union.

Glossary

  • Risk factors

    Facts, situations or circumstances that relate to the severity and likelihood of an adverse impact, including facts, situations or circumstances at the level of the business partner, such as whether the business partner is not a company covered by this Directive or other comparable mandatory sustainability due diligence legal acts; at the level of geography and context, such as the level of law enforcement with respect to the type of adverse impact; and at the level of sectors, of business operations, and of products and services.

  • Chain of activities

    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 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 authorised.

Regulations

  • Corporate Sustainability Due Diligence Directive (CSDDD)

    The Corporate Sustainability Due Diligence Directive is Directive (EU) 2024/1760. After Omnibus I, Member States must transpose it by 26 July 2028 and apply it from 26 July 2029, to companies with more than 5,000 employees and EUR 1.5 billion in net worldwide turnover. The Netherlands has a draft bill, the Wivo, which names the ACM as supervisor.

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    Commission adopts guidelines under Article 19(2), points (a), (d) and (e), and guidance on model contractual clauses (Article 18)