The Cor­por­ate Sus­tain­ab­il­ity Due Dili­gence Dir­ect­ive (CS3D) intro­duces sig­ni­fic­ant oblig­a­tions for com­pan­ies regard­ing the pre­ven­tion and mit­ig­a­tion of human rights and envir­on­ment­al viol­a­tions with­in their oper­a­tions, sub­si­di­ar­ies, and sup­ply chains. The dir­ect­ive applies to large EU and non-EU com­pan­ies with sub­stan­tial glob­al oper­a­tions, depend­ing on the num­ber of employ­ees and turnover thresholds. Key com­pli­ance dead­lines range from 2027 to 2029, depend­ing on com­pany size and rev­en­ue. Non-com­pli­ance can res­ult in severe pen­al­ties, includ­ing fines up to 5% of glob­al turnover, exclu­sion from pub­lic pro­cure­ment, and per­son­al liab­il­ity for man­age­ment. Affected com­pan­ies will need to estab­lish robust risk man­age­ment sys­tems, con­duct reg­u­lar risk assess­ments, and imple­ment pre­vent­ive meas­ures, such as updat­ing con­trac­tu­al clauses and policies, as well as con­duct­ing audits and sup­pli­er train­ing. HVG Law can, togeth­er with EY Tax/ EY Law, assist busi­nesses by review­ing sus­tain­ab­il­ity report­ing, ana­lyz­ing glob­al sup­ply chain policies, and help­ing imple­ment neces­sary changes in the leg­al frame­work.

The Green Claims Dir­ect­ive (GCD) is an EU reg­u­lat­ory frame­work aimed at com­bat­ing ‘gre­en­wash­ing’ by ensur­ing that com­pan­ies make sub­stan­ti­ated, trans­par­ent envir­on­ment­al claims. The GCD applies to most com­pan­ies and impacts sev­er­al cor­por­ate func­tions, includ­ing Mar­ket­ing and Advert­ising, Leg­al & Com­pli­ance, and Product Devel­op­ment. Non-com­pli­ance can res­ult in pen­al­ties such as fines of up to 4% of annu­al turnover, con­fis­ca­tion of rev­en­ues, and exclu­sion from pub­lic pro­cure­ment oppor­tun­it­ies. Once the GCD enters into force, Mem­ber States will have 24 months to imple­ment the dir­ect­ive. HVG Law provides, togeth­er with EY Tax/EY Law, expert guid­ance to help com­pan­ies com­ply, offer­ing ser­vices such as review­ing exist­ing claims, devel­op­ing veri­fic­a­tion pro­cesses, and align­ing busi­ness strategies with GCD require­ments.

In today’s busi­ness land­scape ESG factors play a crit­ic­al role in the invest­ment pro­cess. Con­sequently, investors are increas­ingly recog­niz­ing the import­ance of ESG due dili­gence and com­pli­ance through­out the M&A pro­cess. Par­tic­u­larly in private equity and ven­ture cap­it­al invest­ments amongst green funds and impact invest­ing com­pan­ies, ESG factors form a pivotal part of the invest­ment strategy. To address this grow­ing need, we offer both leg­al due dili­gence on ESG factors and provide cus­tom­ized clauses in trans­ac­tion doc­u­ment­a­tion as well as post-trans­ac­tion ESG integ­ra­tion. We will provide you with recom­mend­a­tions and guid­ance on actions to safe­guard com­pli­ance with and (fur­ther) improve on ESG factors, both dur­ing the trans­ac­tion and at the imple­ment­a­tion there­of.

In addi­tion to our expert­ise in trans­ac­tion­al M&A due dili­gence, HVG Law also assists with intern­al ESG com­pli­ance assess­ments. We help you eval­u­ate ESG top­ics that are rel­ev­ant to your organ­iz­a­tion and provide a detailed descrip­tion of the object­ives and approach of the intern­al ESG com­pli­ance assess­ment. This assess­ment helps you pro­act­ively man­age ESG risks and oppor­tun­it­ies, enhan­cing your company’s sus­tain­ab­il­ity and com­pli­ance with evolving reg­u­la­tions.

The Equal Pay Dir­ect­ive is an import­ant step towards clos­ing the gender pay gap with­in the EU. This dir­ect­ive is adop­ted by the European Uni­on (EU) and has entered into force on 10 May 2023 and should be imple­men­ted in to Dutch legis­la­tion by 7 June 2026 The dir­ect­ive aims to cre­ate more trans­par­ency and account­ab­il­ity regard­ing pay struc­tures. For the Neth­er­lands, this dir­ect­ive has sev­er­al implic­a­tions:

Pay Trans­par­ency:

• Employ­ers must be trans­par­ent about their pay policies and struc­tures. This means that employ­ees have the right to receive inform­a­tion about the pay of col­leagues in sim­il­ar pos­i­tions, without hav­ing to dis­close their own salary. This is inten­ded to identi­fy and address unjus­ti­fied pay gaps.
• Dutch com­pan­ies, espe­cially lar­ger organ­iz­a­tions, are required to reg­u­larly report on their pay struc­tures and the gender pay gap.

Bur­den of Proof on Employ­ers:

• If an employ­ee sus­pects they are being paid unfairly based on gender, the employ­er must prove that the pay is fair and based on object­ive cri­ter­ia.

Sanc­tions and Fines:

• The dir­ect­ive requires mem­ber states to intro­duce effect­ive sanc­tions for com­pan­ies that do not com­ply with the rules.

Pre­vent­ive Meas­ures for Gender Dis­crim­in­a­tion:

• Employ­ers will also need to take pre­vent­ive meas­ures to avoid gender dis­crim­in­a­tion in their pay struc­tures. This may lead to stricter intern­al audits and adjust­ments to HR pro­cesses to ensure women are treated equally.

Leg­al Solu­tions: HVG Law, togeth­er with EY PAS, provides tools that ana­lyze payroll data, mak­ing it easi­er for our cli­ents to meet basic report­ing oblig­a­tions. The data offers valu­able insights on which HR policies can be cre­ated or adjus­ted, and we can advise on their imple­ment­a­tion to ensure com­pli­ance with the dir­ect­ive. Finally, we offer more in-depth ana­lys­is of vari­ous employ­ment terms, recruit­ment, and pay policies, review­ing them for com­pli­ance with the prin­ciples of the dir­ect­ive.