What ESG means in Dutch law
No Dutch statute defines ESG. The term comes from investment and reporting practice, where it groups environmental, social and governance factors into a single lens for assessing a company beyond its financial figures. In legal terms it is a container: the obligations that matter in a Dutch courtroom come from tort law, from company law, from consumer protection law and from directly applicable European legislation, not from the abbreviation itself.That distinction is not academic. A company cannot be sued for having a weak ESG score. It can be sued because a particular act or omission falls below the standard of care it owes, because a public sustainability claim misleads consumers, or because its annual reporting does not meet the requirements of Title 9 of Book 2 BW. The practical question is therefore always which concrete norm a claimant is invoking.The three pillars remain useful as a way of mapping where those norms sit.| ESG pillar | Typical legal anchors in the Netherlands |
| Environmental | Duty of care under article 6:162 BW, environmental permits and the Omgevingswet, emissions and energy legislation, sustainability claims in advertising |
| Social | Employment and health and safety law, equal treatment legislation, supply chain due diligence, human rights standards used to fill in open norms |
| Governance | Duties of directors under articles 2:9 and 2:129 or 2:239 BW, annual accounts and sustainability reporting, the Dutch Corporate Governance Code, inquiry proceedings before the Enterprise Chamber |
The duty of care behind ESG claims
Almost every ESG case brought in the Netherlands is built on article 6:162 BW, the general provision on wrongful acts (onrechtmatige daad). Conduct is wrongful if it infringes a right, breaches a statutory duty, or breaches what is required by the unwritten standard of care in society (de ongeschreven zorgvuldigheidsnorm). That third limb is an open norm, and it is the reason ESG disputes can be litigated at all in the absence of a specific statutory prohibition.An open norm has to be filled in. Dutch judgments do that by reference to the seriousness and foreseeability of the harm, the cost and feasibility of precautions, the state of scientific knowledge, human rights instruments such as the European Convention on Human Rights, and soft law that the company itself has endorsed, including the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises. Soft law does not become binding through citation, but it is treated as evidence of what a careful company in that sector was expected to do.The Urgenda case shows the mechanism at its clearest. On 20 December 2019 the Supreme Court (Hoge Raad) upheld an order requiring the Dutch State to reduce greenhouse gas emissions by at least 25 per cent by the end of 2020 compared with 1990, reasoning from the positive obligations in articles 2 and 8 of the Convention. That judgment binds the State, not private companies, and the Convention does not apply horizontally between a claimant and a company in the same way. Its importance for corporate cases lies in the method: an open standard of care can be given concrete content using external, verifiable benchmarks.The point to hold on to is that a claimant does not have to prove that ESG is binding. The claimant has to prove that this defendant, in these circumstances, did less than reasonable care required.What the Shell judgment actually decided
The Shell case is the most cited and the most frequently misdescribed decision in this field, so it is worth setting out precisely. On 26 May 2021 the District Court of The Hague ordered Shell to reduce the CO2 emissions of the group and its value chain by net 45 per cent by the end of 2030, measured against 2019. On 12 November 2024 the Court of Appeal in The Hague set that order aside and dismissed the claims.The reversal was not a rejection of the underlying principle. The Court of Appeal held that Shell owes a duty of care to counter dangerous climate change, that human rights considerations help to give that duty content, and that such a duty can in principle be enforced through the civil courts. What the Court declined to do was fix a reduction percentage for this individual company, because it found no sufficient consensus on a figure that could be attributed to a single firm. It also refused an order relating to investment in new oil and gas fields, holding that the claim as formulated was not sufficiently defined to be granted.Milieudefensie lodged an appeal in cassation. The Supreme Court heard oral argument on 22 May 2026; the opinion of the Advocate General and the judgment are still to come. Until the Supreme Court rules, the judgment of the Court of Appeal stands, which means there is currently no court-imposed reduction percentage on Shell. Any memorandum or policy document that still assumes the 45 per cent order is in force is out of date.For other companies the practical reading is narrow but real. A duty of care in relation to climate harm has been accepted at appellate level. The obstacle for claimants is quantification: they must show what this defendant should concretely have done and failed to do, rather than pointing at a global carbon budget. That shifts the argument towards company specific evidence, internal knowledge, feasible alternatives and the company’s own published commitments.
How an ESG claim reaches a Dutch court
ESG claims almost never come from an individual claimant. They are brought as collective actions under article 3:305a BW by a foundation or association whose objects cover the interest at stake. Since the entry into force of the Wet afwikkeling massaschade in collectieve actie (WAMCA) on 1 January 2020, that route is available for damages as well as for injunctions and declaratory relief, but the admissibility requirements are demanding.A claim organisation must show an adequate governance structure, a supervisory body, transparent and acceptable third party funding, sufficient representativeness for the group it purports to act for, and a sufficiently close connection between the claim and the Netherlands. Collective claims must be entered in the central register for collective actions, and where several organisations bring competing claims about the same event the court appoints one exclusive representative. These are real filters: a significant share of collective actions is decided on admissibility before the substance is ever reached.In practice the injunction remains the more effective ESG instrument. An order to stop or start doing something avoids the causation and quantification problems that make collective damages claims for diffuse environmental harm extremely hard to win. Where damages are claimed, the claimant must still establish causation under Dutch law, and the more diffuse the harm, the heavier that burden becomes.Jurisdiction is a second reason why these cases are filed here. A company with its registered seat in the Netherlands can be sued before the Dutch courts, and claims against foreign group companies have been joined to proceedings against a Dutch parent. In the Nigerian oil spill litigation the Court of Appeal in The Hague ruled on 29 January 2021 on the liability of a Nigerian subsidiary and imposed an obligation on the parent side of the group in relation to leak detection, confirming that a Dutch anchor defendant can pull foreign conduct into a Dutch courtroom. Group structure is therefore a litigation risk factor in itself, and worth reviewing alongside the liability exposure of the individuals who run those entities.Greenwashing is the fastest moving ESG risk
For most companies the realistic ESG exposure is not a climate injunction but a challenge to what they say about themselves. Dutch law treats misleading sustainability messaging as an unfair commercial practice under articles 6:193a and following BW. A claim is misleading if it contains inaccurate information, or if it is accurate but presented in a way that deceives the average consumer, and a material omission counts as well. The burden of proving that a factual claim is correct rests on the trader.That framework has already been applied to sustainability advertising. On 20 March 2024 the District Court of Amsterdam held that a series of statements by an airline about the sustainability of flying, including messaging built around offsetting and fuel contributions, painted a misleading picture and were therefore unlawful. The judgment did not require the company to stop advertising; it required the advertising to be capable of substantiation.The rules tighten further from the autumn of 2026. Directive (EU) 2024/825 on empowering consumers for the green transition had to be transposed by 27 March 2026 and applies from 27 September 2026. It bans generic environmental claims such as environmentally friendly or climate neutral where no recognised excellent environmental performance can be demonstrated, prohibits claims that a product has a neutral, reduced or positive environmental impact based on offsetting schemes, and restricts sustainability labels that are not based on a certification scheme or established by public authorities. Enforcement in the Netherlands sits with the Autoriteit Consument en Markt, which has published guidance on sustainability claims and has previously required companies to amend or withdraw them.The operational rule is simple. Every environmental claim needs a substantiation file that exists on the day the claim is published, not one assembled after a complaint.Reporting duties and Dutch annual accounts law
Sustainability reporting under the Corporate Sustainability Reporting Directive is not a separate compliance exercise sitting next to the annual accounts. It lands inside them: the sustainability information forms part of the management report (bestuursverslag) governed by Title 9 of Book 2 BW, is prepared on a double materiality basis covering both the effect of the world on the company and the effect of the company on the world, and is subject to external assurance. The scope and the timetable of the directive have been amended at European level through the omnibus package, so the first question for any company is which wave it now falls into and from which financial year.The litigation relevance of reporting is often underestimated. Published sustainability information is evidence. It can be held against the company in an advertising dispute, in a supply contract that warrants compliance, in a tender, and in a tort claim where the question is what the company itself knew and promised. Companies that describe ambitions in their reporting in the language of commitments create the benchmark against which their conduct will later be measured.The CSDDD after Omnibus I
The Corporate Sustainability Due Diligence Directive, Directive (EU) 2024/1760, was substantially amended by the first omnibus directive, Directive (EU) 2026/470, published in the Official Journal on 26 February 2026. Three changes matter most.First, the harmonised civil liability regime has been removed. The original directive obliged Member States to provide a specific liability route for damage caused by a failure to comply with the due diligence obligations. That regime is gone, and liability is left to national law. For the Netherlands that means claimants fall back on article 6:162 BW, which returns the discussion to the standard of care described earlier in this article rather than to a dedicated statutory cause of action.Second, the ceiling for financial penalties is set at 3 per cent of net worldwide turnover, replacing the earlier minimum maximum of 5 per cent.Third, the timetable has moved. Member States must transpose the amended directive by 26 July 2028, and the obligations apply from 26 July 2029. Companies within scope therefore have a longer runway, but the underlying substantive duty to identify, prevent and mitigate adverse human rights and environmental impacts in their chain of activities, on a risk based approach, has not disappeared. Contractual cascading through supplier terms continues in the meantime, which is why many mid-sized Dutch suppliers already face these requirements through their customers rather than through legislation. Our separate guide to the Corporate Sustainability Due Diligence Directive sets out the scope thresholds and the due diligence steps in more detail.What this means for directors
Sustainability decisions are board decisions, and Dutch company law already contains the standards against which they are judged. Under article 2:9 BW every director owes a duty of proper performance of the tasks assigned to him or her, and internal liability towards the company arises only where a serious reproach (ernstig verwijt) can be made. Under articles 2:129 and 2:239 BW the management board is directed by the interests of the company and the enterprise connected with it, which is a broader yardstick than shareholder return and gives a board room to weigh environmental and social consequences without breaching its mandate.Listed companies also work with the Dutch Corporate Governance Code, which places long term value creation and sustainability at the centre of the board’s task and operates on a comply or explain basis. The Code is not statute, but a departure that is neither applied nor explained is precisely the kind of material a claimant or a works council will use.There is a second forum that is easy to overlook. The Enterprise Chamber (Ondernemingskamer) can order an inquiry into the policy and affairs of a company under articles 2:344 and following BW where there are well founded reasons to doubt sound policy, and can find mismanagement (wanbeleid). A board that ignores plainly foreseeable environmental or human rights exposure, or that decides without any documented weighing of it, is exposed on that route as much as on a tort claim. The rules on inquiry proceedings and the dispute resolution procedure were modernised by the WAGEVOE, which has been in force since 1 January 2025.External liability of a director towards a third party is harder to establish and requires a personal serious reproach against that individual, but it is not theoretical where a director personally signed off on statements or decisions that were known to be unsupportable. The practical protection is process: documented options, documented advice, and minutes that show the trade off was actually made. That is also the theme of our note on the role and duties of the board of directors.What companies should do now
Start by identifying which obligations actually bind the company, because the answer differs sharply between a listed group, a large private company in the reporting scope, and a supplier that meets none of the thresholds but has customers who do. That mapping exercise decides where budget belongs.Then work backwards from the two realistic claim types. For sustainability messaging, build and keep a substantiation file for every public claim, check offsetting based language against the rules that apply from 27 September 2026, and give one person ownership of what marketing publishes. For conduct claims, look at where the company has knowledge of a foreseeable and serious risk, what feasible measures exist, and what the company has publicly promised. The gap between promise and practice is where these cases are won and lost.Third, align the documents. Sustainability reporting, supplier terms, customer warranties, financing covenants and advertising should say compatible things. In several disputes the decisive evidence has come from the company’s own reporting rather than from external investigation.Finally, treat governance as evidence. Board and committee minutes that record the assessment, the alternatives and the reasons for the choice are the strongest available answer to the allegation that a risk was simply ignored.Working with Law and More
Law and More advises Dutch and international companies on the legal side of ESG: assessing exposure to collective actions, reviewing sustainability claims before they are published, preparing for the reporting and due diligence obligations that follow from European legislation, and advising boards on how to document decisions so that they hold up if they are later examined. If you would like to know where your organisation stands, Law & More is happy to review your position and set out the options; you can reach our lawyers directly to arrange that.Frequently asked questions
What does ESG stand for in corporate governance?
ESG stands for Environmental, Social, and Governance, which evaluates corporate performance beyond traditional financial metrics, focusing on sustainability and ethical practices.
How are Dutch courts influencing corporate responsibility regarding ESG?
Dutch courts apply the general duty of care in article 6:162 BW to environmental and social conduct. The Hague Court of Appeal confirmed in November 2024 that Shell owes such a duty, while setting aside the fixed reduction percentage that had been imposed in 2021. That case is now before the Supreme Court.
Why are sustainable practices important for modern corporations?
Because failures now carry legal consequences. Misleading sustainability claims are unfair commercial practices under articles 6:193a and following BW, reporting obligations are enforced through annual accounts law, and conduct that falls below the standard of care can be challenged in a collective action under article 3:305a BW.
What are the implications of landmark rulings on corporate governance in the Netherlands?
Rulings such as Urgenda and the Shell appeal show that the open standard of care in article 6:162 BW can be applied to climate and human rights conduct. They do not by themselves make ESG frameworks binding. Binding duties come from statute, from EU reporting rules and from the contracts a company signs.
