Project R-15711

Taxation as an instrument to promote sustainable entrepreneurship (Research)

The view that companies should not act solely with a profit-driven focus but also bear social responsibility has gained significant importance over the past decades. The concept of corporate social responsibility (CSR) – known in Dutch as maatschappelijk verantwoord ondernemen (MVO) – implies that companies, in addition to pursuing economic goals, must also consider the societal and environmental impact of their activities. Businesses are expected to actively contribute to sustainable development and to account for their broader societal role. Within the European Union, this business perspective has evolved from a purely voluntary practice into a normative framework, under which (large and publicly listed) companies are increasingly required to report transparently on their societal impact. This shift towards hard law is, among other things, driven by concerns over greenwashing and the need for reliable information for investors, policymakers, and consumers. The first step in this evolution was taken with the adoption of Directive 2014/95/EU (the so-called Non-Financial Reporting Directive or NFRD), which required certain large companies to disclose non-financial information. With the adoption of the Corporate Sustainability Reporting Directive (CSRD – Directive (EU) 2022/2464 of 14 December 2022), this obligation was significantly expanded. Large companies are now required to report on material sustainability issues. These refer to the three dimensions of sustainability reflected in the acronym 'ESG': Environmental (environment), Social (society/social responsibility), and Governance (corporate governance). The ESG framework enables the measurement of sustainability performance within companies and provides policymakers and investors with a practical tool to assess corporate sustainability efforts. Taxation plays a crucial role in encouraging enterprises to pursue such sustainable policies. This study uses comparative legal analysis to examine how tax instruments aimed at promoting sustainable entrepreneurship are embedded at the national level. The research seeks to identify fiscal challenges and effects, and to formulate recommendations for improving sustainability policy, with attention to both ecological and social sustainability.

01 March 2025 - 28 February 2029