Dutch investment funds and managers gauge the Corporate Sustainability Reporting Directive
Published on 26th January 2024
What is the status of the Dutch implementation of the CSRD and its implications for investment funds and fund managers?
The Corporate Sustainability Reporting Directive (CSRD) came into force in 2023, broadening the scope of its predecessor, the Non-Financial Reporting Directive, and introducing extensive further reporting requirements for large – and some listed – companies.
The CSRD has attracted the attention of fund managers (of both alternative investment funds (AIFs) and undertakings for collective investment in transferable securities (UCITS) as it did not provide a clear scope for investment funds and these fund managers.
Investment funds
The CSRD explicitly excludes both AIFs and UCITS from its scope. This exclusion is due to the existing disclosure requirements under the Sustainable Finance Disclosure Regulation (SFDR). The Dutch legislator confirmed that AIFs and UCITS are exempt from the CSRD in its CSRD implementation.
Fund managers
Unlike investment funds, fund managers of AIFs and UCITS are not exempt from the CSRD. The CSRD did not clearly specify whether these fund managers could become subject to the CSRD reporting requirements.
The Dutch legislator in its implementation clarified the CSDR's scope, in which it noted the following: "Managers of AIFs, managers of UCITS, and investment firms that manage individual portfolios, are not covered by the scope of the decision insofar as it concerns the investments of their clients."
The exact meaning of "insofar as it concerns the investments of their clients" is not detailed in the implementation. There is some perception in the market that this implies an exclusion of fund managers from the CSRD's scope. However, it is yet to be determined whether this interpretation aligns with the intended purpose of the CSRD and the legislator's intentions.
Furthermore, questions have been raised regarding an exemption for fund managers managing individual portfolios. The Dutch Fund and Asset Management Association has requested that the Ministry of Finance clarifies that the exemption for fund managers also applies captures to fund managers managing individual portfolios under the top-up.
Osborne Clarke comment
Further clarity on the scope of this exemption, both for fund managers in general and for those managing individual portfolios, is expected to be provided by the legislator in subsequent phases of the CSRD implementation.
