October 16, 2026
CSDDD Compliance for Malaysian Exporters and Suppliers
Overview
If you supply goods or services to a large EU company, you may already be receiving due diligence questionnaires, codes of conduct, or requests to demonstrate your labour and environmental standards – even though the Corporate Sustainability Due Diligence Directive (CSDDD) itself, after the EU’s 2026 simplification, now only directly applies to very large EU companies (5,000 or more employees, over EUR 1.5 billion in turnover). You may never be regulated by CSDDD yourself. If your buyer is, their compliance runs through you.
Why your buyer is asking, even if you’re not “in scope”
A large EU company managing its own CSDDD due diligence obligation has to be able to show it assessed risk across its value chain – and the simplest way to do that is to push a questionnaire, a code of conduct and audit rights down to its suppliers, including you, regardless of your own size.
A protection built into the rules for smaller suppliers
The Omnibus reform that narrowed CSDDD also introduced a “value chain cap”: large reporting companies are limited in how much information they can demand from suppliers with fewer than 1,000 employees. If a request from an EU buyer looks disproportionate to your size, there may be a genuine basis to push back – worth checking before you simply comply with everything asked.
However, this can be problematic in practice as your customer may then simply let you know that without that information, they will source from elsewhere – or not let you know anything and simply proceed with sourcing from the competition. You should therefore tread carefully.
What a due diligence request usually looks like
a questionnaire covering labour conditions, wages, safety and environmental practices
a code of conduct to sign
audit or inspection rights
a remediation plan if issues are found, rather than automatic termination – CSDDD’s own logic requires your buyer to work with you before dropping you
Read the contract your buyer sends you
EU buyers are increasingly building CSDDD‑driven terms into supply contracts: warranties of compliance with a code of conduct, cooperation with audits, and remediation expectations on both sides if issues surface. Know what you’re actually committing to before you sign.
Check your contract thoroughly and rely on a lawyer with experience in international supply chains and EU law, in particular, especially when foreign laws come into play, as will often be the case when your contract partner sits in the European Union. See our full treatment of supply chain contract terms for the broader approach; the points above are the ones your EU counterparty will push hardest on.
Why work with us on this
We regularly advise Malaysian suppliers directly on due diligence questionnaires and codes of conduct, and we sit on the other side of the table too – advising the EU buyers who send them – drawing on our broader EU regulatory compliance work.
Get your EU due diligence questionnaire reviewed
Contact us
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