Sustainability reporting and due care: practice what you preach
20 November 2023
The entry into force of the Corporate Sustainability Reporting Directive (CSRD) on 5 January 2023 marked an important step in the development of Environmental, Social and Governance (ESG) standards. The reporting requirements ensuing from this legislation will be supplemented with a duty of care when the Corporate Sustainability Due Diligence Directive (CSDDD) takes effect. A similar development took place in the United Kingdom last year.
In her two-part article in Tijdschrift voor vennootschapsrecht, rechtspersonenrecht en ondernemingsbestuur, a professional journal on company law, the law of legal entities and corporate governance, Yentl Coenradie discusses the latest developments on the introduction of ESG standards. Her article compares the EU and UK frameworks for sustainability reporting and due care.Developments and regulations in the Netherlands and Europe (part I)
An inquiry (in Dutch) by Statistics Netherlands (CBS) revealed that sustainability is garnering a great deal of interest. It is an important issue for companies too. However, a lack of ESG standards will quickly give rise to a risk of greenwashing. To provide more guidance, several legislative and regulatory proposals have been published in recent years. Yentl discusses three Dutch initiatives: a pamphlet by 25 professors, the bill for the Responsible and Sustainable International Business Conduct Act (Wet verantwoord en duurzaam internationaal ondernemen) and an update of the Corporate Governance Code. At the European level, she focuses on the CSRD and the proposal for the CSDDD, comprehensively explaining the scope and the sanction and enforcement mechanisms of these Directives.Developments and regulations in the United Kingdom (part II)
Sustainability and the environment are important issues in the United Kingdom as well. Inspired by similar sentiments, the UK introduced reporting requirements and duties of care in company law in 2022 by means of Regulations amending the Companies Act. Yentl discusses the scope and the sanction and enforcement mechanisms of these Regulations and compares them with the EU legal framework. Based on this comparison, Yentl concludes her article by making some recommendations on how to implement the CSRD and the CSDDD in Dutch company law so as to facilitate compliance with the new requirements.
How to prepare for ESG developments
While some reporting requirements will not be binding until a year from now, a clear vision and sustainability strategy are nevertheless essential.
Our multidisciplinary team of 30 lawyers, including specialised partners, applies its climate change expertise to various core disciplines, such as energy, litigation, competition, investment management, environment and planning legislation and ESG reporting. The team's advice on regulatory aspects, subsidies and the granting of permits is often key to the success of client projects. Whether the matter concerns the implementation of regulations under the EU Green Deal, ESG due diligence or advice to large companies on how to meet their Paris goals: Houthoff applies an integrated approach.
Please contact our ESG experts for more information.
