Understanding CSRD Regulations in the Netherlands and Their Impact on ESG Compliance

Sustainability and responsible business practices have become central to how companies operate today. The European Union has introduced new rules to ensure companies report on their environmental, social, and governance (ESG) efforts more transparently. One of the most significant developments is the Corporate Sustainability Reporting Directive (CSRD).

This blog post explains what CSRD means in the context of ESG, how it applies in the Netherlands, who must comply, and the exemptions available.

Dutch office building designed with sustainability in mind

What is CSRD in the Context of ESG?

The Corporate Sustainability Reporting Directive (CSRD) is a European Union regulation that aims to improve and standardise corporate sustainability reporting. It replaces the earlier Non-Financial Reporting Directive (NFRD) and expands the scope and detail of sustainability disclosures.

CSRD requires companies to report on how their activities affect the environment, society, and governance. This includes information on carbon emissions, resource use, social policies, diversity, human rights, and anti-corruption measures. The goal is to provide investors, consumers, and other stakeholders with clear, comparable, and reliable ESG data.

The directive aligns with the EU’s broader sustainability agenda, including the European Green Deal, aiming to make Europe climate-neutral by 2050. By mandating detailed ESG reporting, CSRD pushes companies to take sustainability seriously and integrate it into their core strategies.

Specifics of the CSRD Regulation in the Netherlands

The Netherlands, as an EU member state, implements the CSRD through national legislation aligned with EU requirements. Dutch companies will need to comply with the CSRD rules, which started in the 2024 reporting year, with reports published in 2025.

Key points about CSRD in the Netherlands include:

• Expanded Scope: More companies must report under CSRD than under the previous NFRD. This includes large companies and listed small and medium-sized enterprises (SMEs).

• Reporting Standards: The Netherlands adheres to the European Sustainability Reporting Standards (ESRS), which specify the information companies must disclose.

• Digital Reporting: Companies must submit sustainability reports in a digital, machine-readable format to improve accessibility and analysis.

• Audit Requirements: Sustainability reports must be audited or assured by an independent third party to ensure accuracy and reliability.

• Integration with Financial Reporting: ESG information must be included in the management report, linking sustainability performance with financial results.

  
  

Dutch regulators and industry bodies provide guidance and support to help companies prepare for these new obligations.

Is CSRD Mandatory for All Companies?

CSRD is not mandatory for every company in the Netherlands or the EU. Instead, it applies to specific categories of companies based on size, listing status, and sector.

The directive significantly expands the number of companies required to report under the new rules, but some smaller businesses remain exempt.

Who Does CSRD Apply To and What Are the Exemptions?

Companies Covered by CSRD

CSRD applies to:

• Large Companies: Defined as those meeting at least two of the following criteria:

- More than 250 employees

- Net turnover exceeding €40 million

- Total assets over €20 million

• Listed Companies: All companies listed on EU-regulated markets, including SMEs, except micro-enterprises.

• Non-EU Companies: Companies with substantial activity in the EU (net turnover above €150 million in the EU) must also comply if they have at least one subsidiary or branch in the EU.

  
  

Exemptions

• Micro-Enterprises: Companies with fewer than 10 employees and very low turnover/assets are exempt.

• Non-Listed SMEs: Small and medium-sized enterprises that are not listed on stock exchanges are generally exempt, though some may opt in voluntarily.

• Certain Sectors: Some sectors may have specific reporting rules or exemptions, but these are limited.

  
  

Practical Example

A Dutch manufacturing company with 300 employees and a €50 million turnover will need to comply with CSRD. It must prepare detailed sustainability reports audited by a third party and submit them digitally. Meanwhile, a small family-owned business with 15 employees and a €2 million turnover is exempt but may choose to report voluntarily to attract investors or customers.

What Does This Mean for ESG Compliance in the Netherlands?

CSRD raises the bar for ESG transparency and accountability. Dutch companies covered by the directive must:

• Collect and manage ESG data systematically.

• Align sustainability goals with business strategy.

• Prepare for external audits of their ESG reports.

• Use standardised reporting formats to ensure comparability.

  
  

This shift encourages companies to improve their sustainability performance, not just report on it. Investors and stakeholders will have better information to assess ESG-related risks and opportunities.

For companies not yet covered by the CSRD, the CSRD signals a future in which sustainability reporting will become the norm. Early preparation can provide a competitive advantage.

CSRD represents a major step forward in how companies in the Netherlands and across Europe disclose their sustainability efforts. By understanding its requirements and scope, businesses can better navigate the transition and strengthen their ESG commitments. For stakeholders, CSRD promises clearer insights into corporate sustainability, supporting more informed decisions and a more sustainable economy.

If your company is preparing for CSRD compliance, start by assessing your current ESG reporting practices and identifying gaps. Seek expert advice if needed, and consider how sustainability can become a core part of your business strategy.