Tax, Legal & Workforce - Sustainability

Effective governance is essential for successfully implementing changes in strategy and business model, structuring deals, proper risk management, promoting sustainability in operations, and long-term value creation. Companies face constantly changing regulations and higher expectations from their stakeholders, making solid governance structures and the right knowledge among directors and commissioners necessary to implement these changes. Organisations must proactively adapt to new standards and best practices to build resilience and achieve sustainable success.

From our global sustainability team at PwC Legal Business Solutions, we assist with what is truly needed in these matters, share practical insights, advise and train the C-suite regarding their growing tasks and obligations, embed the impact of legislative changes in (transaction) documentation, and develop and implement a sustainable strategy together.

A fit-for-purpose tax strategy for a company is crucial, as it must meet stakeholder expectations, international developments, competitiveness, and sustainability goals. To gain stakeholder trust and comply with voluntary and mandatory reporting standards, companies opt for greater transparency in their tax policies and practices, which can go beyond legal requirements. At the same time, governments and tax authorities worldwide are increasingly focusing on tax policies that encourage companies to reduce emissions and their carbon footprint. Tax governance goes beyond just fiscal transparency reporting. It also involves formulating a long-term tax strategy, assigning roles and responsibilities, and managing tax risks. With tax governance, companies can align their tax strategy with their business strategy and social responsibility.

The increasing importance of sustainability affects many companies' goods flow, both incoming and outgoing. Reducing CO2 and other harmful gas emissions is often a challenge within the organisation but even more so in the supply chain. The supply chain includes many different partners, such as suppliers, manufacturers, and distributors worldwide, making cost and efficiency management complex. On top of this, rapidly changing legislation adds to the challenge.

EU regulations such as CBAM (Carbon Border Adjustment Mechanism), EUDR (EU Deforestation Regulation), EPR (Extended Producer Responsibility), and the plastic tax are part of broader EU efforts to promote sustainability and reduce environmental impacts. This often involves developing legislation, making it challenging for companies to navigate and make future decisions.

In addition to sustainability legislation, geopolitical developments also play a significant role in developing supply chain strategies. The new reality resulting from rapidly changing measures announced by the US and the responses from other countries impact international trade. As the full impact of this is not yet known and will become clear in the short term, companies must prepare for it. This can be done by collecting and analysing data and planning their next steps based on that, ideally creating flexibility in the goods flow. PwC adopts a versatile approach, combining customs, VAT, TP, and CIT and (sustainable) supply chain expertise.

An employer's sustainability policy in the Netherlands is not only a matter of social responsibility but also aligns with various requirements laid down in labour law. According to various equal treatment laws, the Wage Transparency Act, and rules regarding working conditions, employers are required to create a safe and healthy working environment and to reward employees equally for equal work. Implementing sustainable data processes and practices, in consultation with your works council, such as policies on diversity and inclusion, well-being, and equal treatment, will contribute to a healthier and more motivating work environment for employees.

Overall, a good sustainability policy impacts not only the environment but also employee motivation and engagement, in line with existing Dutch labour law. This strengthens the employer's reputation and can contribute to lower absenteeism and higher productivity, which is beneficial for the organisation and its employees.

Sustainability reporting goes beyond transparency and accountability; it is a powerful catalyst for achieving ambitious sustainability goals such as CO2 neutrality. The Corporate Sustainability Reporting Directive (CSRD) (i) provides a framework for measuring and adjusting sustainability performance, (ii) promotes collaboration within the value chain, and (iii) helps organisations to deploy their resources more effectively through insights and materiality analysis. An important part of the CSRD is the double materiality analysis, which provides insight into both the impact of activities on the outside world and the financial sustainability risks and opportunities. Sustainability reporting also emphasises social sustainability, with themes such as diversity, inclusion, and social responsibility. Through joint actions and measuring the effectiveness of measures, organisations can increase their impact on society and the environment. Implementation requires reliable data, a streamlined process, expertise in various sustainability aspects, and the right technology. PwC translates large amounts of data into valuable insights into sustainability performance with its specialists.

At the same time, the regulatory framework around sustainability is still developing. The 'Omnibus Simplification Package', presented by the European Commission on 26 February 2025, proposes a change in the scope and phasing of the CSRD reporting obligations. The Omnibus Simplification Package also includes proposals related to the Corporate Sustainability Due Diligence Directive and the EU Taxonomy.

Regardless of whether and when legal obligations may come into effect for companies, investors, customers, and regulators continue to seek reliable and transparent sustainability information. Even without legal obligations, there is a continued need for this information. Simplified sustainability reporting based on voluntary reporting standards can provide a solution.

For companies, it is essential to continuously innovate to stay ahead of competitors and create new markets. Additionally, companies see the need to become more sustainable, partly under pressure from new regulations. Nationally and internationally, several subsidies and tax facilities are available to stimulate innovation and sustainability. From the EU, significant financial support for businesses is also included as one of the main building blocks in the Green Deal Industrial Plan.

Within PwC, the Sustainability, Innovation & Incentives team has extensive experience in obtaining and accounting for subsidies for clients. Where necessary, we work with our colleagues from Strategy&, Legal & State Aid, Valuations, Capital Project & Infrastructure, and Sustainability Reporting. Our experts are experienced with the development cycle of strategic investment projects and associated technologies—from project idea to market introduction. The impact of new technologies on the company's carbon footprint and the value chain, the underlying business case, and the relevance of the (inter)national regulatory framework are also in scope.

The EU has committed to a climate-neutral Europe by 2050 in the climate law. The EU aims to reduce its net greenhouse gas emissions by at least 55 percent by 2030 compared to 1990. With the EU Clean Industrial Deal, the European Commission proposes an additional interim reduction level of 90% by 2040.

The Emissions Trading System (ETS) is a cornerstone of the EU strategy to reduce greenhouse gas emissions. ETS has existed since 2005 and is an important part of the measures package to achieve 55% emission reductions by 2030 in the Fit for 55 package. The connection with CBAM is also an important element in this. The scope of the ETS will steadily expand in the coming years, including the maritime sector and the separate ETS 2 system for road transport and the built environment. ETS also plays an important role in the proposed plans of the Clean Industrial Deal. Through ETS, emissions are reduced. With the CID, it also seems to be preparing to link ETS emissions to actual emission reductions.

Energy Tax

The revision of the EU directive for the taxation of energy products and electricity aims to ensure that this tax better aligns with the impact on the climate, environment, and health. The goal is to remove barriers to clean technologies and introduce higher tax levels for inefficient and polluting fuels.

The proposed amendment to the Energy Tax Directive is an important part of the Clean Industrial Deal, aimed at reducing energy costs and promoting the use of clean energy over fossil fuels.

Energy products and electricity are taxed in the EU based on an EU directive dating from 2003. A revision of this directive has been announced as part of the Fit for 55 package, and the importance of this revision has recently been emphasized again in the EU Clean Industrial Deal. The revision of the EU directive aims to ensure that the taxation better aligns with the impact on climate, the environment, and health. The goal is to remove barriers to clean technologies and introduce higher tax levels for inefficient and polluting fuels. In this way, the use of clean energy should be promoted over fossil fuels.

Our experts are experienced in advising a range of parties that are or may be subject to energy taxation, from energy suppliers and solar parks to industrial installations where own electricity is generated, or where off-grid solutions must be worked with due to grid congestion. Where necessary, this is approached pan-European, in collaboration with our local colleagues.