CORPORATE SUSTAINABILITY AND EU LEGISLATION An Analysis of the Influence of the CSRD and the CSDDD on Environmental Collective Action by Companies in the Netherlands

Abstract

In recent years, the role of companies in climate change mitigation has gained significant attention, yet motivating companies to undertake environmental actions remains challenging. This study examines corporate sustainability from the theoretical perspective of large-scale collective action. Within this theory, stressors counteracting opportunities for collective action and facilitators enhancing such efforts have been identified, and it has been argued that third-party intervention is needed to mitigate stressors and amplify facilitators. In the literature, the influence of EU legislation on environmental collective action by companies has so far been overlooked. This research addresses this gap by analyzing the influence of two recently adopted EU directives, the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), on corporate sustainability. The study consists of two separate parts. First, through document analysis, five main ways in which the CSRD and the CSDDD address large-scale collective action are identified: standardization, transparency, communication, power and punishment, and accountability. Second, semi-structured interviews with 13 large Dutch companies explore companies’ perspectives on how these directives influence relevant stressors and facilitators of corporate environmental action. The results show that companies perceive a largely positive influence on the influence of the CSRD and the CSDDD on the themes identified from the document analysis, even though there are important limitations to the directives’ influence that need consideration. In addition, competition, legal uncertainty, resources, and personal and social norms are newly identified themes regarding the influence of the CSRD and the CSDDD on corporate sustainability.