5 takeaways from the Dutch implementation proposal of the CSRD

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On January 13th, the Dutch government submitted the CSRD implementation bill (Wet implementatie richtlijn duurzaamheidsrapportering) to the House of Representatives for consideration. The bill transposes the European Corporate Sustainability Reporting Directive (CSRD) into Dutch law.

The legislation introduces measures for implementing the CSRD’s requirements on auditors, audit firms, and the public availability of sustainability reporting by listed companies. In a letter to Parliament, Minister of Finance Eelco Heinen outlined the changes and their implications. In another letter addressed to King Willem-Alexander, Minister Heinen elaborated on specific amendments made to ensure full compliance with the directive.

The 5 key changes introduced by the CSRD implementation bill

The implementation of the CSRD leads to amendments in various Dutch laws, including the Audit Firms Supervision Act (Wet toezicht accountantsorganisaties), the Financial Supervision Act (Wet op het financieel toezicht), the Dutch Civil Code, and several other statutes.

1. One-to-one transposition of the CSRD

The Dutch government has opted to transpose the European directive into national law on a one-to-one basis, avoiding additional national requirements. Minister Heinen emphasized that this approach "ensures complete alignment with EU standards" and provides consistency for businesses operating across member states. He added, "By aligning with the existing framework for statutory audits of financial statements, we prevent unnecessary duplication and avoid extra regulatory pressure on businesses."

2. Broadening the definition of auditors

The bill adapts the definition of an auditor in the Financial Supervision Act. This change reflects the possibility that other EU member states may permit sustainability reports to be verified by independent assurance service providers, rather than traditional auditors. Minister Heinen noted in his letter to the King, "This adjustment accommodates different practices across the EU while maintaining rigorous standards for assurance."

3. Registration of third-country auditors

The legislation introduces a provision allowing auditors from non-EU countries to register with the Dutch Authority for Financial Markets (AFM) to perform assurance engagements on sustainability reports. Minister Heinen highlighted this change as part of a broader effort to reflect "the global nature of corporate reporting and the need for international cooperation."

4. Disciplinary measures for assurance work

The bill allows the professional conduct tribunal to suspend or revoke an auditor’s registration for up to three years for issues related to assurance work on sustainability reports. This disciplinary measure is intended to ensure accountability and maintain high-quality assurance services.

5. Temporary rules for auditor appointment extended

A temporary provision allowing supervisory boards or management boards to appoint auditors – when shareholders' meetings fail to do so – has been extended to include the 2025 financial year. Minister Heinen clarified, "This measure provides flexibility for businesses as they adjust to the new requirements."

Broader context and legislative timeline

The CSRD implementation bill reflects the Dutch government's commitment to aligning with EU sustainability goals while balancing the needs of businesses. In a letter accompanying the bill, Minister Heinen wrote, "The CSRD represents a major step forward in ensuring reliable and transparent sustainability data. This is critical not only for corporate accountability but also for providing stakeholders with the information they need to assess environmental, social, and governance (ESG) performance."

The bill has followed a structured timeline:

Balancing compliance and reducing burden on businesses

Minister Heinen stressed that the government aims to implement the CSRD in a way that minimizes the administrative burden for businesses, particularly small and medium-sized enterprises (SMEs). "We have made use of the flexibility within the directive to limit additional obligations for companies," he stated in his letter to Parliament.

Where possible, the CSRD requirements have been integrated with existing regulations for statutory audits. According to the minister, this approach "ensures that we remain consistent with the current system, avoiding unnecessary complications for businesses while fostering transparency in sustainability reporting."

In addition to legislative measures, the government is working with various organizations to support businesses, especially SMEs within the supply chains of reporting entities. "These initiatives are vital to ensure the entire value chain is prepared for the transition to sustainability reporting," Heinen added.

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