NL – Non-financial reporting, 2nd NAP

Pillar II

Due diligence at EU level

Corporate Sustainability Reporting Directive (CSRD)

“A general due diligence obligation, ideally at European level, is the key element in the smart mix of RBC measures. This obligation should not only promote RBC but also respect a level playing field for businesses, prevent fragmentation and enhance impact. The government therefore welcomed the publication on 23 February 2022 of the European Commission’s proposed Corporate Sustainable Due Diligence Directive (CSDDD). This proposal is the first step towards European legislation. It aims to encourage businesses to contribute to respect human rights and the environment in their own operations and throughout their value chains. The Netherlands also has its own responsibilities. The 2021-2025 coalition agreement ‘Looking out for each Other, Looking Ahead to the Future’ details agreements committing the Netherlands to encouraging RBC legislation in the EU and to introducing national RBC legislation that promotes a level playing field with neighbouring countries and implementation of forthcoming EU legislation. The Commission’s proposal will therefore form the basis of a national policy proposal, in anticipation of the forthcoming CSDDD. The aim is for the two proposals to run parallel to each other, so that any anticipated changes to the draft Directive can be included in the national legislative process.

The proposed EU Corporate Sustainability Reporting Directive (CSRD – see next section) is also relevant in relation to due diligence. This revised Directive will require a larger number of businesses to be transparent in their reporting on relevant sustainability criteria and the due diligence processes applied. In addition to this legislative proposal on reporting, the inclusion of a due diligence process is an approach used in several EU instruments, such as the proposal for an EU Regulation to combat deforestation, the planned Batteries Regulation and the Conflict Minerals Regulation referred to above.” P. 56

Corporate Sustainability Reporting Directive (CSRD)

“Non-financial reporting obligations were applicable to all listed companies with more than 500 employees since 2017. The annual report of these companies must include information on how they respect human rights. The European Commission’s recent legislative proposal51 on CSRD requires a greater number of businesses than before to provide information on the impact of sustainability factors on the company as well as the company’s impact on people and the planet. The draft Directive’s scope includes all large credit institutions and insurance companies, all large enterprises and all listed companies, with the exception of listed micro-companies. In line with the UNGPs, accountability should be given of the due diligence process, including a description of any negative impacts in the company’s value chain resulting from its own activities or from its business relations and supply chain. The Commission’s proposal is that large, listed companies and other large enterprises, banks and insurance companies should start reporting as of financial year 2023, and small and medium-sized listed companies as of financial year 2026.” p. 56.

ACTION POINTS PILLAR 1	Aim	Responsible party	Timeline
Due Diligence and CSRD
Negotiate the Corporate Sustainability Reporting Directive (CSRD)	National implementation of reporting obligations in line with the CSRD.	J&V, FIN	The Directive is expected to be adopted by EU legislators in 2022.

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