In recent years ESG has evolved from being, predominantly, a topic of (corporate) public regulation, to being part of the broader commercial and corporate law topic of ‘sustainability’. Moreover, soft law notions relating to ESG, which are voluntarily adhered to by corporates, are rapidly evolving into sources used to develop binding legislation, fill open legal norms and shape legal obligations. This trend, with additional emerging legislation and societal pressure, has caused ESG and sustainability to become board issues. 

As a result of the emerging reporting obligations on a variety of ESG topics and the legislation applicable to a broad range of companies, there is growing focus on ESG as an integral part of a company’s strategy. Conducting business in a sustainable manner has become a prerequisite for access to investments, attracting new talent, and managing reputational matters.

In the Netherlands, there is no particular emphasis on a specific area of ESG in the sense that all components, in principle, require the same priority. Two topics, however, are worth separately mentioning: 

• climate change, this is considered one of the most urgent topics impacting all ESG aspects; and 
• nitrogen emissions, a 2019 ruling by the highest administrative court continues to impact all construction, industry and infrastructure projects in the Netherlands.

ESG is a broad theme that encompasses a wide range of regulation. ESG-related matters are regulated through general rules of law as well as through specific legislation.

In the Netherlands, the general standard of tort is of importance as it has historically been used as a basis for civil redress for environmental protection. Generally speaking, open norms have been used to shape ESG-obligations.

In addition, existing legislation is in place for specific areas within the sphere of ESG, as follows:

• Focusing on the “E”, environmental protection is mainly regulated through the Environmental Management Act, the Nature Conservation Act, the Soil Protection Act and, by the Environment Act, which is expected to enter into force on 1 January 2024. In general, a company has a duty of care to refrain from performing an activity which results in significant adverse consequences for the physical environment, or if such consequences threaten to arise from it. Separately, in light of growing concerns regarding climate change, the Climate Act sets reduction targets of greenhouse gas emissions in the Netherlands by 2030 and 2050. 
• Focusing on the “S”, relevant acts are the Equal Treatment Act and the Diversity Act. The Diversity Act (2022) introduced a quota for the supervisory boards of Dutch Amsterdam-listed companies as well as gender balance targets for the board and senior management levels of “large” listed and non-listed Dutch companies. 
• As for the “G”, the Corporate Governance Code stipulates inter alia that management boards have a fiduciary duty to consider the environmental and societal impact of the company’s strategy. As of the financial year starting on or after 1 January 2023, the Code emphasises ESG and defines long-term value creation, as “sustainable long-term value creation”. In sum, the “G” covers business ethics, business conduct, values and corporate culture. These factors underpin the capacity of the company to include and consider environmental goals and social standards.
• Focussing on disclosure regulations in the Netherlands, the Civil Code requires large companies to include a statement on non-financial performance indicators in the board’s statement within the annual report (Articles 2:391 and 2:397 Civil Code). Such stipulations are the consequence of EU law, specifically the EU Directive 2014/95 regarding disclosure of non-financial and diversity information by certain large undertakings and groups) (NFRD). In January 2023, the Corporate Sustainability Reporting Directive (CSRD) entered into force. The CSRD, through 12 underlying Sustainability Reporting Standards (ESRS), imposes detailed sustainability reporting requirements at EU level on a large group of companies covering a wide variety of sustainability related topics, including ESG matters, respect for human rights, anti-corruption, and anti-bribery. It will significantly change and expand the ESG disclosure landscape in the Netherlands. 
• Furthermore, due diligence obligations are likely to increase. The Child Labour Due Diligence Act was enacted in 2019, but has not yet entered into force. Furthermore, a draft initiative bill on Responsible and Sustainable International Business Conduct (“Initiative Bill”) is pending in Parliament, obliging all Dutch undertakings operating internationally to take every possible measure in order to prevent, mitigate and limit adverse effects on human rights, labour rights and/or the environment of their activities. The Dutch government initially planned to develop a separate Dutch Act on Corporate Social Responsibility, but the Minister for Foreign Trade and Development Cooperation recently reported that this plan is not (yet) being rolled out in view of the initiative bill. The minister is, together with the drafters of the bill, exploring options for a bill that would receive broad support. The bill however received significant criticism. In parallel, on an EU level, a proposal for a Corporate Sustainability Due Diligence Directive (CSDDD) was published, with the aim to directly regulate corporate social governance in general instead of only indirectly via the non-financial reporting obligations of the NFRD. Direct regulation through mandatory due diligence of supply chains, nevertheless, does exist for specific high-risk sectors such as timber or conflict minerals. The CSDDD proposal introduces a substantive corporate duty for certain companies to perform due diligence to identify, prevent, mitigate and account for external harm resulting from adverse human rights and environmental impacts in the company’s own operations, its subsidiaries and in the value chain. Other proposals containing due diligence stipulations pending at EU level are, for example, laid down in the draft Deforestation Regulation (2021/0366(COD)), the new Batteries Regulation (2020/0353(COD)) and in the Proposal by the Commission prohibiting the placing on the EU market of products made by forced labour (COM/2022/453 final). 

In this respect, there are several initiatives to highlight:

• The Netherlands has anti-money laundering regulations in place. The most important act is the Money Laundering and Terrorist Financing Prevention Act, implementing EU law (Anti-Money laundering Directives). 
• In 2020/2021 the Dutch Competition Authority (ACM) published in 2020/2021 its Draft Guidelines on Sustainability Agreements (see www.acm.nl/nl/publicaties/leidraad-duurzaamheidsafspraken-gereed-voor-verdere-europese-afstemming). By doing so, the ACM acknowledges that collaboration between corporates can positively contribute to the achievement of public sustainability goals. In order to combat greenwashing and provide some guidance in this respect, in January 2021, the ACM published Guidelines on sustainability claims, which provide a set of five rules of thumb for businesses in making and phrasing sustainability claims (see www.acm.nl/en/publications/guidelines-sustainability-claims). The ACM increasingly actively enforces these guidelines through dialogue and, if needed, enforcement of behavioural remedies or fines. In addition, the Dutch Advertising Code Committee (Reclame Code Commissie) tightened the rules for sustainability claims in advertising. 
• ESG plays an important role in public procurement regulation. The Public Procurement Act expressly sets environmental thresholds on energy for public buyers. Furthermore, the central and decentralised governments have concluded a Manifesto for Socially Responsible Contracting and Procurement, according to which governments concerned must take into account impacts on environment and biodiversity, climate, circular (including bio-based), International Social Conditions (chain responsibility), diversity and inclusion and social return.

ESG-related issues have been the subject of a wide range of litigation in the Netherlands:

• Sustainability claims in advertising have been challenged before the Advertising Code Committee. The rulings frequently create much publicity. The same applies to the regulation of sustainability claims pursuant to the Guidelines on Sustainability Claims by the ACM, as discussed in the previous section.
• Public enforcement cases are numerous. They range from filing objections against permits, requests to revoke licenses, as well as enforcement requests to public authorities. The highest administrative court has ruled more than once that national legislation was contrary to the Habitats Directive, having far-reaching consequences for the industry and all infrastructure and construction projects and also led to numerous enforcement requests against airports, industrial sites and farms. More recently, NGOs in the Netherlands have requested that the Dutch Financial Markets Authority (AFM) enforce ESG disclosure obligations. For example, NGOs may find that a specific company has not made some or all required ESG disclosures and ask the AFM to enforce compliance in respect of that specific company. 
• As in other jurisdictions, private enforcement in the Netherlands is on the rise. Examples are:
  • The Urgenda-case (Supreme Court, 2019) (see uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:HR:2019:2007) and the Friends of the Earth Netherlands et al. v. Royal Dutch Shell judgment (first instance, 2021, under appeal) (see uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:RBDHA:2021:5339). Both cases concern fighting climate change and decreasing carbon emissions. 
  • Several private enforcement actions against airports, aviation companies and the Dutch State concerning CO2 emissions and the obligation to reduce CO2 emissions are currently pending.
  • Enforcement actions on the basis of unfair trade practices or general tort law are also pending. An example is a case filed by an NGO against an aviation company. According to the campaigners the aviation company breaches European consumer law by misleading advertisement claims. 

We expect public and private enforcement to increase in coming years in view of funding initiatives as well as on the basis of imminent European regulations.

Soft law instruments

In the Netherlands, there is not necessarily a strict separation between the various binding regulations and soft-law instruments. Notions of soft law may, depending on their precise content and the issue at hand, be one of the factors informing the interpretation of open legal norms. For example, in its May 2021 Shell ruling in first instance (subject to appeal), The Hague District Court found that in determining what the unwritten standard of care required under general Dutch tort law is, the United Nations Guiding Principles on Business and Human Rights (UNGP) are suitable as guidelines regardless of whether the defendant company involved has committed to the UNGPs because, according to the court, their content is “universally endorsed”.

The ambition to confirm and supplement the most important aspects of the Organisation for Economic Co-operation and Development (OECD) Guidelines, such as the recommendations regarding due diligence obligations into binding legislation is however clearly visible both on the EU level, as well as on the national level. 

The International Corporate Social Responsibility (CSR) policy has been based on voluntary measures via the stimulation of sectoral cooperation through covenants. After an evaluation the Dutch government announced it would await EU legislation given the importance of having a level playing field across the EU. The Dutch government has already developed a new policy for state participants requiring them to set ambitious targets on climate, environment, a safe working environment, human rights, financial transparency, and anti-corruption, to be tested periodically. As for its efforts regarding the private sector, the government updated its National Action Plan Business and Human Rights, focussing on realising the UNGPs within the three pillars, one of which is the corporate responsibility to respect human rights.

Moreover, a development we expect that pledges, endorsements, and other similar instruments will play a more prominent role in litigation on how to interpret and apply open norms and/or assess behaviour in the context of unfair market practices.

Stakeholders

ESG is currently on the agenda at the level of Members of Parliament (MPs), government, regulators, NGO's, corporates, stakeholders, as well as investors.

Regulators such as the ACM as well as the Dutch Financial Supervisory Authorities, AFM and the Dutch Central Bank (DNB), have developed guidelines on sustainable investment, horizontal cooperation and greenwashing.

Nevertheless, in the short term, climate litigation by NGOs and mass claims (both supported by litigation funders) are expected to be a large driving force in ESG trends. Most notably in this context are the aforementioned Shell and Urgenda rulings. In 2022, Friends of the Earth summoned various Dutch multinationals to reduce emissions and announced it will start new similar proceedings if necessary. Furthermore, in 2020, the so-called WAMCA act entered into force. This act clears the way for collective actions for damages, which is expected to spur ESG-related litigation, and funding thereof.

Investor representative organisations are also engaged in ESG. Eumedion, for example, is a representative body of institutional investors in Dutch-listed companies. For 2023, Eumedion’s focus points are the implementation of the CSRD and the European Sustainability Reporting Standards, the effectiveness and improvement of say-on-pay legislation, and the proposed legislation on due diligence. In addition, Eumedion requested companies in their Focus Letter 2023 to take actions on the dependencies and impact of the company related to biodiversity and to be transparent about human rights strategies. Certain private equity firms – in turn also pushed by their limited partners – apply similar pressure on their portfolio companies, requiring them to adopt and provide transparent disclosure on their ESG strategy and the implementation thereof. The same goes for banks and other financial institutions: their own shareholders as well as their regulators require banks to disclose on their ESG footprint, which increases the focus on the position of their clients.

National Contact Points (NCPs)

The Dutch NCP deals primarily with specific instances of alleged non-observance of the OECD Guidelines and facilitating dialogue. This concerns a wide range of matters such as funding, engagement by institutional investors and social aspects in portfolio companies. From the NCP’s yearly report, it is clear that their focus is on about a dozen cases per year. As of 2014, the NCP was endorsed by the Dutch government to also conduct cross-company research. 

Although ESG disclosures are an important aspect of ESG-regulation in general, it is not the dominant topic as is discussed in Question 2. Due diligence obligations are an important part of the regulation plans of both the Dutch as well as the EU legislature. The proposed regulatory frameworks will make the so-called ‘six OECD steps of due diligence’ mandatory. Initiatives include civil liability. Furthermore, companies are required to draw up climate plans to reduce emissions and work with climate scenarios, which means having a climate policy in addition to a disclosure obligation. 

As mentioned in Question 2, disclosure regulations in the Netherlands are based on EU law. This includes the NFRD, the Regulation on sustainability-related disclosures in the financial services sector (SFDR), the Taxonomy Regulation for Sustainable Activities (Taxonomy Regulation), and the Regulation on prudential requirements for credit institutions (Capital Requirements Regulation). 

In general, ESG disclosures must – except for the SFDR disclosures – be included in the board’s statement in the annual report on nonfinancial performance indicators. SFDR disclosures are – depending on the activity and period in time – required to be published on institutions’ websites, as pre-contractual disclosures, and in the form of periodic reports.

In general, ESG disclosures in the Netherlands are required on an annual reporting basis. The SFDR also requires ESG disclosures prior to investments and on a more continuous basis. 

As for standards, when the CSRD comes into effect, all large companies and all listed companies will be required to report on ESG aspects (double materiality) in the management report on the basis of ESRS. As for companies voluntarily expanding their disclosures on ESG-related issues, these often refer to the standards of the Global Reporting Initiative (GRI) and the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), and report on their operations and policies. Specific sectors have also formalised voluntary additional reporting.

As a consequence of the EU Green Deal and the transition towards a sustainable society, many legislative initiatives are being taken at EU level. These initiatives impact all sectors. This is, for example, the case with the Fit for 55 Package legislation of the European Commission. 

An important sector to which regulation is directed is the financial sector. The European Commission designated the financial sector as one of the driving forces of “mobilising capital” towards a sustainable market. The most significant ESG investments are therefore made in the Netherlands by financial institutions as part of their sustainability strategy and regulatory obligations.

In addition to large public interest companies that were already in scope of certain sustainability disclosure obligations, small and medium enterprises (SMEs) will incur significant effects as well. Large public-interest entities (PIEs), such as listed companies, banks, and insurers are relatively less impacted by the new CSRD disclosure obligations (as mentioned under question 2) compared to listed SMEs. PIEs were already under ESG disclosing obligations due to the NFRD. The CSRD brings listed SMEs under the scope of ESG reporting The CSRD also imposes major new and extensive sustainability disclosure obligations on large PIEs: companies are required to provide information about their strategy, targets, the role of the board and management, the principal adverse impacts connected to the company and its value chain, intangibles and how they have identified the information they report. This information needs to be reported on the basis of the ESRS. The European Commission will ultimately have to adopt the final ESRS, and implementation in the Netherlands is expected to occur through an executive order that is intended to be enabled on the basis of the Act implementing the Directive on disclosure of income tax information.

As for ESG due diligence obligations, the CSDDD will not formally apply to the vast majority of EU companies. About 99% of the companies can be classified as small and medium-sized enterprises, and are therefore exempt from the CSDDD. The Commission has estimated that about 13,000 EU companies will fall under the scope (and 4,000 third-country companies). The exempted companies will, however, be indirectly affected through their business relationships with the companies that do fall under the scope of the CSDDD, since these companies will need to provide information to companies in scope in order for them to effectively meet their due diligence obligations. However, for companies that may indirectly be affected by the CSDDD proposal, a Guideline was published by the European Commission which contains guidance on designing effective and inclusive accompanying support to due diligence legislation as well as information on portals, websites, and so on (see https://international-partnerships.ec.europa.eu/index_en). Also, certain so-called high-risk sectors will be impacted if the draft CSDDD is adopted. On that basis, the EU will, under certain conditions, impose mandatory due diligence requirements on high-risk sectors such as textile, fishery, agriculture, forestry, and mineral extracting sectors. 

Furthermore, we note that some companies merely follow legislation while others add to this by taking initiatives on their own account. 

Private equity

Private equity covers a myriad of sectors and companies where each has their own ESG aspects to consider. Private equity firms, on the one hand, can have the opportunity to invest in businesses divested by companies that are subjected to more stringent ESG-regulation. On the other hand, private equity firms can apply pressure on their portfolio companies, requiring them to adopt and provide transparent disclosure on their ESG strategy and the implementation thereof. The same goes for banks and other financial institutions: their own shareholders as well as regulators and European regulations require banks to disclose their ESG footprint, which increased the focus on the position of their clients. 

Banks and other financial institutions

We see that sustainability initiatives have, to a large extent, become an integral part of banks’ business strategies. Financial institutions in general are designated by the EU as major drivers in the transformation towards sustainable markets. For example, the SFDR specifically covers the financial sector. This is advanced through several means, such as scrutiny of institutions’ own risks in their portfolio as part of prudential regulation, mandatory disclosures of sustainability features of products, and requirements to articulate sustainability considerations in their investment policies.

Voluntary initiatives are a key part of the financial sector’s contribution to sustainability. 

Fashion 

The CSDDD, the Child Labour Due Diligence Act and OECD guidelines are, and will continue to be, increasingly relevant for the fashion sector because their supply and value chains are under intense scrutiny regarding working conditions and child labour. Moreover, the fashion industry is clearly in scope of the ACM’s efforts to enforce its Guidelines on sustainability claims as recent cases against Decathlon and H&M show.

Energy industry 

The energy industry is highly impacted by the broad context of ESG in the context of climate change and emissions as well as through its role in the energy transition. The transition towards renewable energy and the reduction of emissions is an immense challenge. The transition to net zero and climate change causes new ESG challenges as is, for example, shown by the discussion on the adverse impact of lithium on local communities and the environment.

By way of example, the Dutch transmission system operator, has drawn up a so-called 'Green Bonds Framework' (see www.tennet.eu/green-financing), which serves as a framework for monitoring the sustainability quality of the projects financed by issuing green financing instruments and is one of the largest issuers of Green Bonds in the world. 

Real estate industry 

The real estate industry is likely to become highly impacted in the Netherlands. First, the physical risk of climate change could be significant in the Netherlands and may seriously affect living environments. In addition, ESG concerns will have an effect on pricing by, and the requirements from, investors and debt providers with respect to the real estate industry. ESG data management and reporting will significantly enhance the capabilities of pricing in climate risk in the real estate industry. 

Governance of ESG differs between companies. The structure of the ESG governance depends on, for example, the sector in which the company operates and the level of ESG maturity within the company. ESG-related matters are often covered by one project team within the organisation, but ESG can also be integrated in the existing organisation or covered by dedicated ESG functions throughout the organisation. 

There is a clear trend that ESG has become a board issue and also the governance of ESG is of greater interest of stakeholders and other parties. This is emphasized by the mentioned update of the Corporate Governance Code, stipulating that boards have a fiduciary duty to consider the environmental and societal impact of the company’s strategy. 

Further, we expect the CSRD will have a significant impact on sustainability reporting in the Netherlands, both in terms of scope and in terms of nature. These disclosure obligations will result in greater scrutiny towards companies, as well as the companies’ governance over ESG, from regulators, supervisory authorities, and consumers. We expect the AFM to increase its focus on ESG disclosures and the ACM and consumers to intensify their focus on greenwashing (see Question 4). Furthermore, we see that companies are increasingly focused on climate scenario planning and establishing a framework to assess the resilience of a company in all uncertain yet possible climate scenarios.

Lastly, we envisage that further clarifications will be needed on, for example, assurances by auditors with respect to sustainability disclosures and other technicalities concerning the role of auditors.

ESG rating agencies 

Currently, there are no formal requirements regarding governance of ESG service and product providers. Consequently, users cannot always trust the presence of certain quality and reliability safeguards. The AFM has recently stated to be in favour of specific requirements on internal control and governance to ensure reliability and quality of the services provided, as well as proper management of conflict of interest. The latter can arise from the different roles these providers can have.

ESG benchmarks 

Most companies include ESG benchmarks on their websites or in publications. The AFM has stated to be in favour of EU regulation for, among others, reasons of transparency concerning methodologies and underlying data of ESG ratings as well as for specific requirements in terms of governance and management of conflicts of interest. The CSRD and ESRS will create benchmarks to a certain extent, but will not solve the problem of assembling trustworthy ESG data, which are crucial for reporting.

Private companies 

Historically, in Europe, ESG regulation used to apply mainly to regulated markets (i.e. most significantly listed companies). Future ESG legislation will increasingly be directed towards private companies. For example, the CSRD will also be applicable to large private companies and, in subsequent years, to SMEs. The legislative proposals moreover explicitly allow for private enforcement of ESG regulation, on the basis of which increased market vigilance and litigation can be expected. At the same time, we observe that the market proactively makes use of the Draft Guidelines on Sustainability Agreements by the ACM, which facilitate collaboration between corporates that positively contributes to the achievement of public sustainability goals.

Public companies 

As set out in Question 7, PIEs have a broader variety of ESG reporting obligations when the CSRD proposal enters into force insofar as PIEs are driving ESG developments in the Netherlands. However, risks of greenwashing may be actual. We also observe instances in which less sustainable parts of the entities’ activities are being divested to private companies resulting in not having to disclose on these activities. As also described in Question 7, the CSRD, when adopted in its current form, will bring listed SMEs in due time under the scope of mandatory ESG reporting.

Government-owned organisations 

Government-owned entities should take leadership on ESG issues according to the new policy document. The government expects these entities to set an example in their own sectors in pursuing a positive impact on people, society and the climate. The level of ambition of these entities of CSR is periodically assessed. 

ESG agenda 

See above, Questions 4 and 5. 

The most pressing challenge for companies will be the time frame within which companies will have to prepare for EU legislation. Large listed companies will need to disclose on the extensive CSRD requirements for the financial year 2024, meaning that the relevant, trustworthy data should be available by early 2025 at the latest. Obtaining trustworthy data and providing for sufficient safeguards in this respect will be a challenge in itself, as is the case for the lack of prioritisation under the CSRD.

Furthermore, companies will have to set up a due diligence framework under the CSDDD within a relatively short time while the scope and extent of the due diligence obligations under the proposed CSDDD are currently unclear.

Another difficulty around compliance will be the (perceived or actual) tension between companies wanting to set ambitious ESG-targets, while not meaning to be held liable in case these targets and ambitions are not met. On the other hand, companies setting less ambitious targets risk being held in breach of (perceived or actual) obligations to pursue more ambitious policies. 

First, ESG data is only available in a fragmented manner, and, in most cases, incomparable. Another concern is that ESG data tends to be limited or missing context (e.g. reporting high emissions in isolation often lacks context around the products produced with these emissions while these products may in themselves serve the energy transition or transformation to a net zero economy). 

In Urgenda, the Court ruled that, when interpreting the positive obligation of the Dutch State, account must be taken of widely accepted insights in science and internationally accepted standards. Moreover, the Court called the reports of the Intergovernmental Panel on Climate Change (IPCC) important in this regard and used these reports in its assessment.

Several other sources are used regularly by market players to assess their ESG performance. Widely accepted standards include the Science-Based Targets of the Science-Based Initiative (SBTi). Companies have joined the initiative to set science-based climate targets. Companies also rely on information of Morningstar Sustainalytics, which is an independent ESG and corporate governance research, ratings and analytics firm. 

Finally, the EU is currently working on the creation of a European Single Access Point (ESAP) to ensure that investors have easy access to public financial and sustainability-related information on EU companies and EU investment products who make tagged disclosures on this pursuant to the CSRD.

The Netherlands has not developed a separate Taxonomy related to ESG since the EU Taxonomy Regulation is directly applicable in the Netherlands. The Taxonomy Regulation entered into force on 12 July 2020 and is a classification system establishing a list of environmentally sustainable economic activities. Alongside the SFDR, the NFRD and the proposed CSRD, the Taxonomy Regulation complements the sustainable finance regulatory regime. At the core of the Taxonomy Regulation is the definition of a sustainable economic activity. The EU Taxonomy provides for a ‘green’ taxonomy and a social taxonomy (see European Union chapter).

In the short term:

• Development of legislation in relation to companies and ESG, including disclosures, is ongoing at the EU as well as at the national level. The first development has already been set into motion with the entry into force of the EU Taxonomy Regulation. As a consequence, all annual reports by relevant organisations published after 1 January 2022, must contain the information required by the Regulation. 
• Due to the 2022 Russian invasion of Ukraine, the obligations for corporates active in the EU with respect to human rights due diligence in armed conflict has become topical. The UNGPs ask companies to develop a conflict-sensitive approach to mitigate and address human rights risks in armed conflict. 
• Furthermore, we envisage increased monitoring by regulators and supervisory authorities. It remains to be seen whether supervisory authorities will be sufficiently equipped to carry out supervision properly and coherently. We expect the AFM to increase its focus on ESG disclosures and the ACM to intensify its focus on greenwashing.
• The social component of ESG is receiving increased attention, for example on the fundamental issue of equal treatment, in light of various societal developments related to gender and sexual orientation and diversity. These developments also extend to claims and litigation. For example, in 2020, Bureau Clara Wichmann, an NGO, initiated an action leading to compensation from the State for transgender persons suffering from mandatory sterilisation in the past and initiated proceedings to have free birth control provided to young women. 

In the medium term:

• Substantively, the challenge of effectively addressing climate change is the subject of the current debate and legislative initiatives. As is evident from, for example, the European Commission’s Fit for 55 package, this is an area where large parts of society will see significant changes in the short term but also in the next few decades. As for effects in the short term, we'd like to highlight that in December 2022, a provisional agreement was reached in the EU on the Carbon Border Adjustment Mechanism. As an example of the short term effect on the national level, we note that as of January 2023, the Minimum Carbon Price Act has entered into force, which aims at further taxing high-carbon-emitting industries, which are complementary to the current CO2 levy.
• In order to comply with the due diligence obligations for value chains, we expect that contracts within value chains may have to be renegotiated and that the structural reliance within value chains may therefore change. It may be further developed in case law, under which circumstances, ESG considerations could give ground to contractual amendments and/or termination rights.
• In addition, a general trend appears to be the expansion of the scope of stakeholders of companies that can rely on a certain duty of care and/or active due diligence and prevention of harm by these companies. We expect the focus of companies’ performance in the medium term to shift from a predominant focus on financial performance to overall societal performance. This will also impact the duties of executive and nonexecutive boards, their function towards the company, and society at large.
• We expect more public enforcement on ESG, not only by AFM and DNB but also by other public authorities, due to pressure from NGOs and public scrutiny. This may pertain to greenwashing in general and to incorrect disclosures specifically.
• We expect the markets of ESG data rating companies and agencies to become regulated on EU level in order to ensure the transition towards a more sustainable economy.
• It is yet to be seen whether the emerging ESG-regulation will lead to asset partitioning and further protectionism. 

In the long term:

• Investment will be geared towards sustainable initiatives. We expect that rising prices will cause countries to adopt taxation policies to counterbalance any impacts of the competitive advantage of unsustainable products.
• For multinationals domiciled in the EU and/or within scope of EU regulation, the challenge will be how to achieve an international level playing field and how to maintain their competitive position while meeting ESG/sustainability demands and complying with ESG regulation.