NETHERLANDS Law and Practice Contributed by: Guido Koop, Jan de Heer and Nanne Kusters, Loyens & Loeff
deduction or accelerated depreciation, the investment should be notified to the Netherlands Enterprise Agen- cy ( Rijksdienst voor Ondernemend Nederland ) within three months of being made. The Netherlands also has a significant production subsidy scheme (the SDE++ subsidy) for the stimula- tion of sustainable energy production and the reduc- tion of greenhouse gas (GHG) emissions. 6.4 Shareholder or Parent Company Liability As a general principle, shareholders or a parent com- pany cannot be held liable for environmental damage or breaches of environmental law of the violating com- pany in which they have a share and/or their subsidiar- ies as such, unless the shareholder/parent company qualifies as the “de facto manager” in charge of the actual violation. This may be the case for a single or majority shareholder who is also the executive/statu- tory director of the violating company. A factual manager (ie, a natural person who does not have to be a statutory director or executive) can be held liable (next to the violating company itself) if it was responsible for a breach, where it had the means and opportunity to prevent the breach from occurring but the breach occurred nonetheless. It is a relatively high standard and is not often successfully demon- strated in court by a public prosecutor. 6.5 ESG Requirements In recent years, EU sustainability legislation has been put in place which will become increasingly relevant. In particular, the EU Corporate Sustainability Report- ing Directive (CSRD) entered into force on 5 January 2023 and is currently being implemented by the EU member states, and the EU Corporate Sustainabil- ity Due Diligence Directive (CSDDD) is currently still under negotiation by the EU legislative bodies. In summary, the CSRD requires the inclusion of a sustainability report in the management report. This sustainability report must be included in a distinct sec- tion of the management report and must be clearly identified as such. The information provided in that section must cover the sustainability impacts from two perspectives, also known as the double materiality perspective. The CSRD requires in-scope undertak-
ings to report on the effects of their operations on the environment and society (inside-out), and also on how sustainability issues impact their business (outside-in). As such, both the risks of, and impacts on, the undertaking are considered from a materiality perspective. In addition, the reporting is not limited solely to the sustainability of the company itself, but also includes the sustainability of the value chain of which the company is a part. All undertakings fall- ing within the scope of the CSRD will be required to report on a broad collection of ESG topics set out in the European Sustainability Reporting Standards, a uniform set of reporting standards. The sustainability reporting requirements introduced by the CSRD will be phased in gradually until 2028, alongside micro, small, medium-sized and large companies. The CSDDD requires in-scope companies to imple- ment certain processes throughout their value chains in line with ESG criteria. The extent of the obligations under the CSDDD are subject to the current negotia- tions by the EU legislative bodies, but may include: • conducting risk-based human rights and environ- mental due diligence; • adopting a climate change action plan; and • the introduction of directors’ duties in respect of monitoring of and compliance with the foregoing. Recently, under the EU Omnibus package, effective dates of the CSRD and CSDDD, as well as the scope thereof, have been amended, with an aim of achieving a degree of deregulation. Attention is increasingly being paid to other EU ESG regulations, such as the EU Deforestation Regulation, which is expected to become materially effective at the end of 2025 and focuses on ensuring compliance throughout supply chains that products are deforesta- tion free. Similar regulations are expected to be rolled out in the near future, for example, in relation to a ban on forced labour in products. These types of supply chain-related ESG regulations tend to have an impact on how globally operating businesses that are active in Europe need to think about their operational pro- cesses.
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