CSRD should not become a compliance exercise

In the KPMG Climate Letter of 2025, KPMG in the Netherlands calls on audited organizations and societal stakeholders to not lose sight of the ultimate goal of the ESG agenda (focused on environment, people, and governance), despite regulations such as the European Corporate Sustainability Reporting Directive (CSRD). Many companies have already undertaken some form of sustainability reporting in preparation for the implementation of CSRD. However, KPMG still sees risks. Due to the large number of reporting rules and the significant amount of data that needs to be collected, it is important to ensure that CSRD reporting does not turn into just a compliance exercise.

Mariska van de Luur, member of the Board of Directors of KPMG and Head of Assurance, said: "Especially for the second group of large non-listed companies ('wave 2'), which according to the legislation should issue their CSRD report for 2025, risks are seen due to complexity and uncertainty. Ultimately, the CSRD is not just about reporting, but about gaining insight into the realization of companies' ambitions."

The Netherlands must stay aligned with developments in Europe. The European Commission is expected to publish the Omnibus Simplification Package at the end of February, with the aim of reducing the administrative burden for companies and avoiding duplicate reporting. Van de Luur said: "This is an important principle, while also maintaining the high standards of the existing ESG frameworks. Companies from 'wave 2' need more time to practice and develop their long-term strategy, while staying in line with European regulations."

Companies in 'wave 2' must recognize the importance of achieving ESG goals and continue with CSRD preparations. Van de Luur said: "It is advisable to start the double materiality assessment in a timely manner and to conduct a dress rehearsal for obtaining data to gain insight into the availability and reliability of that data. Ultimately, regulations are a means, not the goal. The goal is to make an impact with your ESG strategy and to gain uniform insight into the ESG performance of companies."

KPMG will continue its work in the field of sustainability. The climate paragraph will be included again in the annual accounts, and attention is paid to the connectivity of sustainability and financial reporting. KPMG is also engaging in discussions with companies in 'wave 2'.