Greater scrutiny of connections between executive pay and corporate sustainability performance is likely to be one result of the recently introduced EU Corporate Sustainability Reporting Directive (CSRD)1 and the associated European Sustainability Reporting Standards (ESRS)2.

Transparency of sustainability-linked board remuneration is now mandatory under the CSRD. What’s more, the regulation obliges companies to disclose their sustainability-related impacts, risks and opportunities, thereby increasing pressure on boards to address them. As a result, KPMG expects investors and other stakeholders to ask whether company executives are incentivized appropriately to drive the sustainable transformation of their organizations.

“The CSRD is not simply about reporting. Its ultimate purpose is to drive changes in business practice. More transparent reporting increases accountability and helps financial institutions to direct capital towards greener businesses by providing them with reliable and comparable data on sustainability performance.

Investors, lenders and other stakeholders want to know that management boards understand their organization’s environmental, social and governance (ESG) impacts, risks and opportunities, and have effective strategies in place to manage them. They will therefore expect to see effective pay structures that motivate boards to transform their organizations sustainably.”

— Mark Vaessen, Partner KPMG in the Netherlands

In this context, researchers at KPMG Netherlands analyzed sustainability-related management remuneration at the 50 largest companies in the Netherlands. They also compared the results for the top 25 Dutch companies with the top 25 companies in the UK, Germany and Sweden.

This paper provides supervisory boards, management boards, investors, lenders and other stakeholders with fresh insights into the current strengths and weaknesses of remuneration schemes at Dutch companies as well as KPMG’s recommendations on how they can be improved.

Contact our experts

1 The Corporate Sustainability Reporting Directive (CSRD) requires companies to report on the impact of corporate activities on the environment and society, and requires the audit (assurance) of reported information. Further information: Delegated regulation - EU - 2023/2772 - EN - EUR-Lex (

2 The European Sustainability Reporting Standards (ESRSs) are adopted as delegated acts by the European Commission as part of CSRD regulation to enable companies to publish separate sustainability statements as part of their management reports from 1 January 2024. This significantly affects the scope, volume and granularity of sustainability-related information that companies need to collect and disclose. At the time of publishing this paper, 12 ESRSs including two general standards and ten topical standards across the themes of Environment, Social and Governance have been issued. Further information: Delegated regulation - EU - 2023/2772 - EN - EUR-Lex (