The Corporate Sustainability Due Diligence Directive (CSDDD) entered into force on 25 July 2024, and EU member states have until 26 July 2026 to adopt the laws, regulations and administrative provisions necessary to comply with the CSDDD. In the Netherlands, a draft implementing bill was published on 18 November 2024. The draft bill is open for public consultation until 29 December 2024.

Minimum implementation

In line with current government policy, the draft bill does not contain any provisions other than those necessary for minimum implementation of the CSDDD. The method of implementation is aimed at limiting an additional burden for companies – or, where appropriate, for the supervisory authority – as much as possible.

We refer to our 12 June 2024, 25 March 2024 and 19 December 2023 articles for more information on the scope and obligations of the CSDDD which should, in light of the above, correspond with the implementation in the Netherlands.

Interpretation on and context for various parts

Without deviating from the minimum implementation approach, the draft bill and accompanying explanatory notes contain some provisions and explanations that aim to embed the provisions in the broader Dutch law framework, provide interpretation guidance where necessary, and reduce potential burdens where possible. Some of these include:

• facilitating compliance with climate transition plan obligations, by allowing companies to share information or resources within their group or with other entities;
• adding certain definitions that are not included in the CSDDD to ensure that the CSDDD rules can be properly applied in the Netherlands. These include defining "environment". In Dutch legislation, the term environment usually includes "climate". However, since the due diligence obligation included in the CSDDD does not cover climate, the proposed definition of environment expresses this distinction;
• designating The Netherlands Authority for Consumers and Markets (ACM) as the relevant supervisory authority, including for financial undertakings. Its powers extend to the new due diligence obligations and certain climate transition plan-related obligations, namely: (i) the adoption of the climate transition plan, including its prescribed content; (ii) the publication of the climate transition plan, with the exclusion of publication by companies that already report a climate change transition plan under the CSRD; and (iii) the annual update of the climate transition plan, including the description of the progress made towards reaching time-bound emission reduction targets. The ACM will not monitor the obligation to implement the climate transition plan;
• assuming (by referring to the CSRD in the explanatory notes to the draft bill) that absolute reduction targets for the climate transition planning obligation must be set where Greenhouse Gas emission reduction targets for scope 1, 2 and 3 are concerned;
• not altering Dutch law on tort, except for introducing an extended limitation period in certain situations. Consequently, civil law claimants under the CSDDD must rely on the existing Dutch law framework (Article 6:162 DCC);
• including a provision that leaves room for a future order in council (AMvB), should this prove necessary. This order in council may include clarifications of both the due diligence obligations and the requirements related to the climate transition plan. According to the explanatory notes, these clarifications will not be new rules or regulations and will be in line with the minimum implementation principle; and
• revoking the Dutch Child Labour Due Diligence Act. As for the MP-sponsored Bill on Responsible and Sustainable International Business Conduct, the government is of the opinion that, although this bill has a much broader scope of application, the draft CSDDD implementing bill meets the wishes of the sponsors. It is up to them to decide whether to withdraw their proposal, or for example to submit a proposal to add certain elements of their sponsored bill to the CSDDD implementing bill.