Where CSRD meets legal

Dutch research (SEO Amsterdam Economics and University of Amsterdam) showed that more than 25% of the companies that should report under the Corporate Social Sustainability Directive (CSRD) in 2025 are not (sufficiently) collecting the required information and data points in respect of financial year 2024, meaning that they will most likely not be able to (fully) meet the reporting requirements CSRD imposes on them.

CSRD introduces a comprehensive package of regulations on reporting of non-financial information by corporates (within the scope of CSRD). As of 2025 large corporates are obliged to include non-financial information in their annual reports (over the financial year 2024).

For long CSRD was considered to be a topic in the exclusive domain of audit and advisory. However, nothing could be less true. CSRD is also, and perhaps even in first instance, a legal topic. Not only the interpretation of the various requirements imposed by CSRD require thorough legal knowledge, also the connection with and impact of other laws and regulations such as market abuse and competition require thorough legal knowledge when complying with CSRD.

The obligations imposed by CSRD require companies in scope of the regulations to implement a structure within their organizations that collects all required information and data in order to enable the company to prepare and publish the required reports and information. CSRD, and the oversight on the compliance with CSRD, should be embedded in governance structures e.g. by legally embedding this in constitutional documents and policies. Proper governance, oversight and timely reporting are key in the prevention of liability as well as reputational damage.

Legal becomes also relevant if it comes to non-compliance with CSRD. In case of non-compliance, all kind of liability issues come into play. For example, non-compliance could lead to financial sanctions imposed by (in the Netherlands) the Netherlands Authority for the Financial Markets (Autoriteit Financiele Markten). Shareholders and other stakeholders could claim damages, not only from the company itself, but also from its directors and other direct responsible officers.

Within KPMG Law we combine, on an international level, our legal expertise with the expertise of our audit and advisory colleagues. In multidisciplinary teams we advise our clients on CSRD, preferable to ensure that our clients are well prepared and compliant, but if necessary, also in difficult times when supervisory intervention and mandatory remedial programs are around the corner. In case of questions, please contact one of our international KPMG Law ESG team members for further information.