Implementation of the CSRD in Dutch law one step closer
After some delays (a notable six months past the implementation deadline set by the EU), the legislative proposal for the implementation of the Corporate Sustainability Reporting Directive (CSRD) was submitted to the Dutch House of Representatives on January 13, 2025, by Minister of Finance Heinen.
Legislative proposal for the Corporate Sustainability Reporting Directive in the Netherlands
The CSRD requires large-sized companies to report on their efforts regarding ESG (environmental, social, and governance) factors: sustainability in terms of environment, people, and good governance. Central to this reporting obligation is the so-called double materiality analysis (‘DMA’): a thorough assessment to determine which themes are most relevant (material) to the company in question.
The legislative proposal aligns with the CSRD's framework, with the sidenote that where flexibility was available, the Netherlands has implemented the directive in the least burdensome way possible. This approach aims to minimize additional administrative costs for businesses through aligning with existing legal frameworks and statutory auditing regulations (e.g., for the verification of the DMA, data collection, and reporting by external accountants).
Furthermore, the government is launching initiatives in collaboration with various organizations to support businesses as effectively as possible. Special attention is being directed toward SMEs that are part of the value chains of larger, reporting companies.
An interesting detail mentioned in the accompanying decision memorandum to Parliament is the ongoing discussions in the media (with specific mention of Financieele Dagblad) about the I implementation option the CSRD provides for non-accountants to perform statutory audits. It is noted that further research will be conducted on this issue once the CSRD has been implemented. This could potentially provide companies with more flexibility in selecting their auditing party going forward.
A legal basis
All in all, this step is good news in light of legal certainty for businesses operating in the Netherlands, as it finally establishes a legal basis for preparing sustainability reports. The ongoing discussions at the European level regarding the so-called omnibus simplification package do not affect this milestone. Any updates in this regard—aimed at simplifying Europe's regulatory landscape—are expected in late February 2025. Any changes related to the CSRD are still a long way off, let alone any clarity on what such amendments might entail.
Want to learn more about CSRD implementation? Contact Sake van der Meulen.