Directors of companies are at the heart of ESG. They not only bear responsibility for business operations, but are also tasked with integrating sustainability and social responsibility into the core of their corporate strategy.

The role of directors is even more significantly underlined by the CSRD and CSDD, two pioneering regulatory initiatives that aim to strengthen sustainability transparency and responsibility at European level.

We refer in this context to an earlier article on our website.

ESG - Seeds of Law

1. What obligations does the CSRD place on directors?

The CSRD requires directors to prepare comprehensive ESG reports, including non-financial key performance indicators and sustainability reporting. 

Directors' responsibilities under the CSRD include:

  • Sustainability reporting: directors must ensure that the board report meets the requirements of the CSRD and contains all relevant information on sustainability issues, including objectives, policies, due diligence procedures and risks.
  • Reporting on the role and expertise of directors: Directors should disclose in the report about their role and expertise with regard to ESG. In this context, they should describe their expertise and skills in relation to fulfilling that role or the access they have to such expertise and skills.
  • Collective responsibility: Directors and supervisory bodies are collectively responsible for the compliance of financial statements and management reports with the CSRD. This includes both consolidated and individual reports.

The FSMA (Financial Services and Markets Authority), as the supervisory authority, recently published a communication explaining the challenges of the CSRD Directive for listed companies. Companies can use this communication as inspiration to prepare for sustainability reporting.

2. What does the CSDDD mean for directors?

The CSDDD imposes new responsibilities on directors regarding due diligence processes and the integration of sustainability into the corporate strategy.

Companies are required to draft a plan to ensure that the company's business model and strategy are compatible with the transition to a sustainable economy and global warming mitigation. Directors here are tasked with overseeing these obligations.

Moreover, directors are given a duty of care. This means that when making decisions that affect the company, they must consider the sustainability implications.

3. Are these obligations legally enforceable?

The CSDDD not only imposes responsibilities but also makes them legally enforceable. Directors and similar mandate holders have a duty to include sustainability considerations in their decision-making. Failure to fulfil this obligation may result in personal liability under national regulations.

4. What does this mean for directors' liability as it currently stands?

One striking aspect of the CSDDD is the extension of the directors' liability. This directive will have to be transposed which will extend the scope of national rules regarding directors' default. In other words, if a director fails to comply with the aforementioned duty of care, this may be considered management misconduct within the meaning of the Code on Companies and Associations (CSD).

So it remains to be seen how the Belgian legislator will implement these obligations in national law.

Should you have questions, do not hesitate to consult our specialists: or +32 (0)2 747 40 07.


Read also

ESG: From soft law to hard law

Corporate Law and M&A


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Leo Peeters

Leo Peeters

Koen de Puydt

Koen de Puydt