ESG Insights for Tax & Legal | Oktober 2025
Welcome to our ESG Insights for Tax & Legal, keeping you informed of the latest developments in the fast-moving world of ESG!
This ESG Tax & Legal round-up features:
2. ESG Experts Podcast – EU Clean Industrial Deal now live!
3. CBAM update: Simplification adopted
4. The future of EU funding: the new budget proposal for 2028-2034
5. The EU's 2040 climate target - a new chapter in climate governance
6. Accelerating the clean transition
7. EU Chemicals Industry Action Plan
8. Update: Implementation of the EU Pay Transparency Directive
9. Factsheet Employee Incentive Plan
Enjoy the ESG Insights and please contact our ESG team for Tax and Legal, if you have any questions or feedback - we are happy to help you!
Merijn Betjes
1. Budget Day update
On Budget Day, September 16, 2025, the caretaker government presented the 2026 Tax Plan package to the Lower House of Parliament. It consists also of tax measures in relation to sustainability. Many of the proposed measures will enter into force on January 1, 2026. In our memorandum, we have set out the main points for you.
Download overview or download the two-pager
2. ESG Experts Podcast – EU Clean Industrial Deal now live!
In this episode of the ESG Experts Podcast, KPMG experts from the Sustainability Reporting & Assurance team and KPMG Meijburg & Co – Marco Frikkee, Faiza Oulahsen en Merijn Betjes – talk about the EU Clean Industrial Deal and its implications for business. From decarbonization and tax incentives to strategic planning, the conversation highlights how companies can prepare for a more sustainable future. They highlight common challenges and share actionable tips to keep you moving forward on your ESG journey.
3. CBAM update: Simplification adopted
On September 29, the Council adopted the regulation that simplifies the EU’s carbon border adjustment mechanism (CBAM), as part of the so-called ‘Omnibus I’ legislative package.
The regulation seeks to provide simplification and cost-efficient compliance improvements to the CBAM. The main aim is to reduce the regulatory and administrative burden, as well as compliance costs for EU companies, especially SMEs. The climate ambition behind the CBAM remains unchanged, as about 99% of embedded emissions in the imported CBAM goods will remain covered.
Main elements of the regulation
- Replacing the current threshold exempting from CBAM goods of negligible value, the amendments set a new ‘de minimis’ mass threshold whereby imports up to 50 tonnes per importer per year will not be subject to CBAM rules. The measure is expected to exempt from CBAM mainly SMEs and individuals, which import small or negligible quantities of goods covered by the CBAM regulation.
- Another important modification is that the amended regulation will also permit to avoid any disruptions for importers in the beginning of 2026, while they await CBAM registration: imports of CBAM goods will be allowed under several conditions, pending CBAM registration of the importer.
- Furthermore, the amended regulation contains several other simplification measures for all importers of CBAM goods regarding, for instance: the authorisation procedure, the data collection processes, the calculation of emissions, verification rules, and the financial liability calculation of authorised CBAM declarants. Finally, the amended regulation contains adjustments of provisions on penalties and on the rules regarding indirect customs representatives.
Next steps
The legislative act will be published in the EU’s official journal in the coming days and will come into force on the third day following that of this publication.
If there are any questions and/or you need support, please don’t hesitate to contact us. We are happy to support.
4. The future of EU funding: the new budget proposal for 2028-2034
On 16 July 2025, the European Commission released its proposal for the next Multiannual Financial Framework (MFF), setting the EU budget for 2028–2034 at EUR 2 trillion. While the budget continues to support cohesion, agriculture and social inclusion, a key development for the ESG tax and legal community is the reinforced focus on strategic investments and the financing of these initiatives through new own resources.
5. The EU's 2040 climate target - a new chapter in climate governance
On 2 July 2025, the European Commission proposed an amendment to the EU Climate Law to establish a legally binding target of reducing net greenhouse gas (GHG) emissions by 90 percent by 2040, compared to 1990 levels. This proposal aligns with the EU’s long-term climate neutrality objective and fulfills its legal obligation under the Climate Law to propose an intermediate target following the first global stocktake under the Paris Agreement. The 2040 target builds on the EU’s current binding 2030 target of at least a 55 percent reduction in emissions and aims to guide the EU towards climate neutrality by 2050. Unlike previous frameworks, the 2040 proposal emphasizes flexibility, cost-effectiveness and pragmatic pathways, considering evolving economic, technological and geopolitical realities.
The proposed 2040 target must still undergo discussion and adoption by both the European Parliament and Council through the ordinary legislative procedure. Once adopted, it is expected to form the backbone of the EU’s updated Nationally Determined Contribution (NDC), which is due by September 2025, ahead of COP30 in Belém, Brazil.
6. Accelerating the clean transition
As part of the EU's ambitious climate agenda, including the newly announced 2040 target of a 90 percent reduction in emissions, the European Commission has issued recommendations on tax incentives to support the Clean Industrial Deal (CID). The following provides a detailed analysis of these recommendations and their alignment with other strategic frameworks and mechanisms, including the recently adopted Clean Industrial Deal State Aid Framework (CISAF).
7. EU Chemicals Industry Action Plan
The chemical industry is the industry of the industries. As the EU’s fourth largest manufacturing industry, it contributes to over 96% of manufactured goods, making it a cornerstone of the EU’s industrial resilience and competitiveness. Chemicals are crucial for a wide range of applications in strategic sectors such as defence, cleantech and digital. Europe therefore needs to keep a strong chemicals industry. At the same time, the industry needs to transition to a clean and circular economy model, embracing innovation, strengthening its global competitiveness and ensuring the protection of human health and environment.
8. Update: Implementation of the EU Pay Transparency Directive
The Dutch government is working on the implementation of the EU Pay Transparency Directive. However, the initial timeline has proven unfeasible. Therefore, the timeline has been adjusted:
- The draft bill implementing the Pay Transparency Directive is expected to be submitted to the Council of State by the end of 2025.
- Parliamentary debate is scheduled for 2026.
- The planned entry into force is now January 1, 2027 (instead of June 7, 2026).
What does this mean in practice?
Employers with 150 or more employees will have to report for the first time on the calendar year 2027 (instead of 2026). For employers with 100 to 149 employees, the reporting obligation remains as originally scheduled under the Pay Transparency Directive (first reporting year: 2030).
Use this postponement to get ahead: organizations that start analyzing their pay structures and adjusting processes now will be able to comply smoothly later on and will benefit from increased trust and attractiveness in the labor market. Turn pay transparency into a strategic advantage rather than a last-minute obligation.
9. Factsheet Employee Incentive Plan
To stand out in today’s competitive landscape, it is essential that companies anticipate to labor markets developments, particularly now that employee expectations of the workplace have changed significantly and the competition for talent continues unabated. Rewarding employees is about more than just compensation—it's a strategic tool for boosting motivation and commitment. Effective rewards programs may become crucial for attracting and retaining top talent, fostering an inclusive culture, and to position the organization as an employer of choice in a rapidly changing labor market.
Employee incentive plans are well suited to achieve these goals. They serve as a powerful strategy to enhance motivation, ensure employee engagement, and to make your organization attractive for talented employees.
