The past year has seen several notable ESG-related developments in Denmark, aligned with broader European trends. ESG remains a central focus for regulators, businesses, investors and other stakeholders, with rising expectations around transparency, responsible business conduct and robust governance across value chains.

Corporate Sustainability Reporting Directive

The Corporate Sustainability Reporting Directive (CSRD) was implemented through Act No 480 in May 2024 and requires large and listed companies to report in accordance with the European Sustainability Reporting Standards (ESRS), including more than 1,000 different data points. These requirements will be phased in, but already influence how Danish companies collect and manage environmental data.

“Omnibus” Simplification Initiative

A significant subsequent development was the Omnibus package aimed at reducing and simplifying administrative burdens associated with sustainability reporting and related ESG obligations. The European Parliament proposes narrowing the scope of the CSRD to companies with more than 1,750 employees and EUR450 million in net turnover – the same thresholds as those that apply under the EU Taxonomy.

The initiative sits within a wider European policy discussion on improving competitiveness and streamlining reporting, reflecting the European Commission’s recent burden reduction efforts around sustainability disclosures. While the policy rationale recognises the legitimacy of ESG goals, it also emphasises the need to calibrate reporting requirements to avoid disproportionate compliance costs.

Negotiations between the European Parliament, the Council of the European Union and the European Commission are ongoing, but the EU aims to finalise the legislation by the end of 2025. Therefore, the exact requirements have yet to be decided and will be determined during the trilogue negotiations.

Please see 2.1 Developments in Corporate Governance for more details.

Corporate Sustainability Due Diligence Directive

On 25 July 2024, the Corporate Sustainability Due Diligence Directive (CSDDD) entered into force. The Omnibus simplification initiative limits the scope of the Directive to companies with more than 5,000 employees and EUR1.5 billion in net turnover, and removes the requirement to prepare a climate transition plan.

Empowering Consumers for the Green Transition Directive

Another key development is Denmark’s implementation of the Empowering Consumers for the Green Transition Directive (Directive (EU) 2024/825), which amends the Unfair Commercial Practices Directive (2005/29/EC) and the Consumer Rights Directive (2011/83/EU) to strengthen consumer protection in the context of the green transition. It expands and clarifies the scope of prohibited commercial practices, with particular focus on environmental claims and sustainability-related information, including rules addressing misleading “green” claims and the presentation of product durability and repairability. The Directive is implemented through amendments to the Danish Consumer Complaints Act, which took effect in July 2025, and through amendments to the Danish Marketing Practices Act, which will take effect on 27 September 2026.

European Banking Authority Guidance on ESG Risk Management

At the European supervisory level, the European Banking Authority (EBA) has published its final Guidelines on the management of ESG risks. These Guidelines require credit institutions to integrate ESG risks into their risk management frameworks, business strategies and governance arrangements, underscoring the shift from treating ESG considerations as voluntary or reputational to addressing them as core prudential matters. Institutions are expected to identify, measure and manage ESG risk drivers consistently, to embed ESG considerations into internal controls and board oversight, and to align risk appetite and longer term strategy with material ESG exposures. The Guidelines will apply from 11 January 2026, except for small and non-complex institutions for which the Guidelines will apply at the latest from 11 January 2027.

Danish Consumer Ombudsman’s Recommendations on Environmental Marketing by Traders

In 2024, the Danish Consumer Ombudsman (DCO) issued updated guidance on environmental marketing, setting out key considerations for companies and providing an interpretation of Sections 5, 6 and 13 of the Marketing Practices Act, which concern misleading claims and documentation of facts. The recommendations generally outline what traders must be aware of when using climate, environmental and sustainability claims in their marketing initiatives.

As noted in 1.1 General ESG Trends, the most important developments concern EU regulations implemented into national law, as well as new recommendations from the DCO.

In addition, the government advanced several environmental policy initiatives, including Denmark’s first national PFAS action plan, and new requirements for sustainable construction, which tighten CO2 emission limits for new buildings from 2025. These measures supplement Denmark’s legally binding climate targets and form part of wider efforts to reduce pollution and accelerate the green transition.

Case law has also begun to shape the environmental landscape. The most prominent example is the 2024 Danish Crown judgment, in which the High Court (Vestre Landsret) found that the company’s “climate-controlled pig” label was misleading under the Marketing Practices Act. The case remains Denmark’s most significant climate-related greenwashing ruling to date, and illustrates the increasing legal risks associated with environmental claims.

The DCO’s annual report for 2024 recorded the highest ever volume of greenwashing complaints:

• 162 greenwashing cases were opened by the DCO;
• three companies were reported to the police;
• 14 received formal warnings;
• 59 were informed about the rules; and
• two companies paid multimillion‑krone fines.

The DCO also issued 15 preliminary opinions on planned green marketing through its advance opinion scheme (forhåndsbesked), and handled 142 access‑to‑documents requests.

One such case involved the DCO reporting a brewery for misleading marketing after it labelled its water as “CO2-neutral” without disclosing that the claim relied in part on carbon offsets. According to the DCO, consumers were misled about the product’s actual emissions. The brewery accepted an out-of-court fine of DKK4 million, calculated under a newly introduced and stricter penalty model introduced in 2022.

Overall, the past year shows a clear strengthening of environmental regulation, oversight and legal accountability as Denmark aligns more closely with EU sustainability objectives.

In the past year, Denmark has also seen notable developments in the social dimension of ESG in Denmark.

• Authorities intensified efforts against social dumping, introducing requirements for employer-provided accommodation and increasing scrutiny of working conditions for foreign labour. Government initiatives announced in late 2024 and finalised in early 2025 strengthen enforcement against social dumping (with effect from 2026), including intensified inspections and the power to halt contractors’ work after repeated occupational health and safety breaches.
• New rules on working-time registration and recent Supreme Court case law (published in UfR 2025.2493 H) underscore employers’ obligations concerning equal treatment and the organisation of work.
• The growth of remote and hybrid work has created additional legal considerations, including tax implications and establishment risk for cross-border employers.
• The Danish Act on Gender Balance entered into force on 28 December 2024, implementing EU Directive 2022/2381. It imposes binding minimum shares of the under-represented gender on boards of certain listed companies by 30 June 2026, supplementing the existing Companies Act obligations to set targets and policies for gender balance at board and management levels.

Overall, the “S” in ESG is gaining traction in Denmark, with a clear shift toward more prescriptive regulation, heightened enforcement and a broader understanding of social factors as material compliance and governance risks for companies.

Regarding the governance aspect of ESG, 2024 saw large and listed Danish companies significantly advancing their implementation of the CSRD and the accompanying ESRS governance standards (GOV1-GOV5). These standards explicitly elevate the board’s responsibility for sustainable long-term value creation and require companies to disclose governance structures, role distributions, internal controls, risk management processes and oversight of sustainability matters. In practice, boards, executive management and audit committees have had to clarify responsibilities, increase the frequency of ESG discussions and strengthen documentation of their decision-making processes.

Regulatory developments were the main drivers of change. Danish companies also prepared for the upcoming CSDDD, leading to intensified governance of supply chain risks, enhanced supplier screening and greater value chain oversight. The original transposition deadline for the CSDDD was in July 2026 but with the Stop-the-Clock Directive adopted in April 2025 (see 2.1 Developments in Corporate Governance), the transposition deadline has been postponed to July 2027 and it will become applicable for the first in-scope companies a year later in July 2028. Note that the proposed Omnibus package might bring about changes to some of the obligations set out in the Directive before the transposition deadline.

At the same time, the transition toward integrated annual and sustainability reporting accelerated, with half of the Danish C25 companies adopting integrated reports ahead of the CSRD mandate. This raised expectations for more consistent and transparent governance disclosures, particularly regarding double materiality, board involvement and the role of audit committees.

Supervisory authorities play a central role in enforcing the expanding body of ESG legislation. The relevant authorities are as follows.

• The Danish Business Authority (Erhvervsstyrelsen) monitors annual reports, including statutory sustainability reporting. Its competence generally covers non-financial undertakings and most Danish companies subject to the Danish Financial Statements Act.
• The Danish Financial Supervisory Authority (Finanstilsynet) is the competent authority for supervising financial companies. It conducts ongoing reviews of financial companies’ annual reports, including scrutiny of the ESG information contained therein.
• The Danish Consumer Ombudsman (Forbrugerombudsmanden) enforces the Marketing Practices Act, including oversight of ESG and sustainability-related claims in marketing materials. The DCO may bring and pursue cases on his own initiative.

Alongside enforcement, regulators also issue important guidance. The Danish Business Authority has provided detailed instructions on CSRD implementation and the role of the new sustainability auditor, while the Danish Financial Supervisory Authority has clarified expectations for Sustainable Finance Disclosure Regulation (SFDR) disclosures and the governance of sustainable financial products.

In addition, the Danish Business Authority has made it clear that it will not be expecting perfection from companies in the first years of sustainability reporting. In a letter dated 17 January 2025 to companies subject to sustainability reporting requirements in 2024 and 2025, and to auditors, the Danish Business Authority noted that (translation):

“In the first few years, the authorities will primarily focus on guidance and dialogue with companies, and on ensuring that errors are corrected going forward, but situations may nevertheless arise where errors are so significant and pervasive that, in the interest of the users, it is necessary for them to be corrected in their sustainability reporting.”

While most sectors will be affected by ESG requirements to some extent, the following industries will be particularly affected.

• Financial services (banks, insurers, pension funds) – directly regulated under SFDR, EU Taxonomy, CSRD and EBA guidelines.
• Energy and utilities (electricity, oil and gas, renewables) – subject to strict climate targets and transition requirements.
• Transportation and logistics – airlines, the automotive industry and the broader transport and logistics sector are likely to be particularly affected by ESG requirements, as the DCO has shown a strong focus on green claims in these areas.
• Construction and building – in recent years, the DCO has focused more on this sector when it comes to the marketing of green or sustainability claims. In May 2024 for example, the DCO found that a construction company was unable to document claims regarding the climate, the environment and sustainability used in its marketing, which stated “We are climate neutral” and “We build sustainably” (English translation). In its decision, the DCO emphasised that the construction industry has a high CO2 footprint, consumes a lot of natural resources, and affects the environment negatively in a number of other ways, and that documenting sustainability is difficult, especially using broad claims such as the ones mentioned above. There is also increasing regulation regarding sustainable construction – eg, the new requirements regarding buildings’ climate effect and their CO2e limits, which came into effect on 1 July 2025 through an update of the Danish building regulations. The Green Building Council (Rådet for Bæredygtigt Byggeri) also updated its requirements for the sustainable building certification DGNB, with effect from 1 July 2025, with more ambitious criteria for how to obtain the certification – for example, through an increased focus on the buildings’ actual sustainability results and more incentive for the reuse of building materials.

The war in Ukraine, trade wars and cyber-attacks have, among other things, sharpened the focus on security of supply, sustainable energy sources and cybersecurity.

The EU’s REPowerEU plan from 2022 aims to phase out imports of Russian fossil fuels while simultaneously accelerating the green transition. The Commission presented further steps in May and June 2025. In June 2025, a proposal was presented for a regulation to gradually phase out imports of Russian gas and oil by the end of 2027. Energy independence is therefore a major concern and may increase the demand for renewable energy sources, given the general desire to reduce dependence on Russian oil and gas. Denmark and several EU member states have consequently launched initiatives to promote the transition to sustainable energy sources.

At the same time, cybersecurity has moved up the ESG agenda. In Denmark, examples of cyber-attacks in 2024 included an attack against the large Nordic bank Nordea, which meant, among other things, that customers were unable to access online and mobile banking options, and there was a similar attack against Copenhagen Airport’s website.

An example of the influence of political developments was expressed by senior vice president of the global Danish jewellery company Pandora, Line Hildebrandt Smith, in the Danish podcast Topchefernes Strategi, in which she talked about how geopolitical developments have affected Pandora’s strategy. with an increased focus on robustness, continuity plans and back-up flow resilience. She also highlighted a general trend for companies to select several different subcontractors and business partners to promote agility in responding to geopolitical developments, crises, etc, where before it was seen as a strength to have few in order to promote effectiveness and lower costs.

The Omnibus Package

In February 2025, the European Commission proposed the Omnibus package, aimed at simplifying EU legislation, amongst other things, including regarding sustainability reporting, to enhance competitiveness and growth and reduce the regulatory burden for companies.

While the full Omnibus package has yet to be approved and is currently subject to negotiations between the European Parliament and the Council, the so-called “Stop-the-Clock” Directive was adopted on 14 April 2025, resulting in reporting requirements under the CSRD Directive being postponed by two years for larger companies that have not yet started reporting, and also for small- and medium-sized enterprises (SMEs). In addition, the transposition deadline and the first phase of the application of the CSDDD covering the largest companies have been postponed by one year.

The Omnibus package is expected to be a key development in shaping corporate governance in the coming year. If the Commission’s proposal is adopted, it will have the following effects, among others.

• Remove around 80% of companies from the scope of the CSRD, leaving only companies with more than 1,000 employees and either a turnover above EUR50 million or a balance sheet total above EUR25 million remaining subject to the directive and its reporting requirements.
• Limit reporting obligations under the EU Taxonomy to the largest companies with at least 1,000 employees and EUR450 million net turnover. Other large companies within the future scope of the CSRD will still be allowed to report voluntarily but will not be required to do so.
• Adopt a voluntary reporting standard based on the SME standard developed by the European Financial Reporting Advisory Group (EFRA) that will limit the information companies or banks falling within the scope of the CSRD can request from the companies in their value chain outside the scope of the CSRD – ie, companies with fewer than 1,000 employees.

In Denmark, all limited liability companies are subject to the Danish Companies Act, which regulates the administration of this type of company, regardless of whether it is listed or not. For example, it regulates management structures, board and director duties, shareholder meetings, etc.

However, listed companies are also subject to additional requirements, including compliance with the rules on ongoing disclosure of inside information under the Danish Capital Markets Act and the EU Market Abuse Regulation, and compliance Nasdaq Copenhagen’s issuer rules. In some cases, they must comply with more stringent financial reporting requirements.

ESG requirements influence management’s responsibility for the overall strategy by obliging management to integrate sustainability and risk considerations as a central part of the company’s long-term decision making.

A new development in how ESG influences the responsibilities of directors is the change in the wording of Section 64e of the Danish Financial Businesses Act, which concerns the requirements imposed on directors for financial companies. In June 2025, a proposed change to specifically include a reference to ESG was implemented, and the provision now states that “the board of directors of a financial undertaking must ensure that its members [the directors] have sufficient collective knowledge, professional competence and experience to understand the undertaking’s activities and the associated risks and the short-, medium- and long-term effects of those activities, taking into account ESG factors”.

An ESG survey published in 2025 by Lederne (a Danish association for managers), EY and Danske Bank shows that smaller companies in particular – where there are often insufficient resources for a dedicated ESG manager – tend to place responsibility for ESG work on the CEO.

In Denmark, there are no specific legal business forms for social enterprises, but it is possible to register a company as a social enterprise with the Danish Business Authority (Erhvervsstyrelsen). This option is voluntary. Doing so will allow use of the term “registered social enterprise” (RSV) in the company’s name, communication and marketing.

There are certain requirements a company must fulfil in order to register as a social enterprise, such as:

• having a social purpose;
• operating independently of public sector control; and
• deriving a direct business-related income of a certain size (at least 10% of the total income, as a rule of thumb).

Not-for-profit companies may be established as associations (forening) in Denmark. A range of association forms is available, including voluntary associations for non-profits, ordinary not-for-profit associations, limited liability associations and co-operatives. The appropriate form depends on the organisation’s specific purpose and interests. In most cases, associations that are not purely voluntary must register and obtain a company number (CVR). However, they are generally not subject to the same business and financial reporting requirements as for-profit companies, given their not-for-profit status.

Socially responsible investors increasingly apply ESG criteria to evaluate potential investments, using structured, systematic frameworks to assess risk and opportunity. Shareholders now expect companies to manage these factors effectively, not only to protect long-term financial returns, but also to ensure that corporate conduct aligns with broader societal objectives.

Through engagement and active voting on ESG-related proposals (often referred to as active ownership), investors can influence corporate behaviour to advance sustainable business practices, promote robust governance, and account for long-term financial, environmental and reputational risks.

ESG obligations also shape the relationship between companies and their shareholders by introducing potential litigation exposure where responsibilities are unmet. Key areas of risk include:

• disclosure and transparency requirements;
• shareholder and investor claims;
• supply chain and parent company liability;
• allegations that companies failed to account adequately for climate-related risks in forward-looking policies; and
• polluter-pays actions.

On 2 May 2024, the European Commission launched a Call for Evidence to review the SFDR. The review seeks to improve legal certainty and usability, clarify product categories, tackle greenwashing, enhance the comparability and reliability of sustainability information, and reduce compliance costs. A legislative proposal to revise the SFDR is scheduled in the Commission Work Programme for Q4 2025.

On 3 September 2025, Denmark announced it would become the first sovereign to issue a government bond fully aligned with the voluntary EU Green Bond Standard. Proceeds from the first issuance totalled DKK7 billion and are earmarked for green public spending, including sustainable transport, renewable energy, agricultural transition and nature restoration.

Another sign of momentum in Denmark’s sustainable finance market is TDC NET (Denmark’s largest digital infrastructure provider) updating its EMTN programme and issuing EUR500 million in sustainability‑linked bonds.

Companies should consider the following when raising and providing finance.

• Capital increase (EU/DK) – governed by the EU Prospectus Regulation (Regulation 2017/1129), MiFID II investor protection rules, market abuse regulation, the Companies Act (issuance/financial assistance), Nasdaq Copenhagen rules and the Danish Capital Markets Act.
• Providing finance – licensing under the Financial Business Act, EU/DK consumer credit regulation, and AML/KYC compliance obligations.
• SFDR disclosure duties – SFDR entity/product disclosures.
• EU Taxonomy – defines criteria for environmentally sustainable activities. Issuers must report taxonomy-eligible/aligned turnover, CapEx and OpEx; financial institutions must disclose portfolio alignment.
• Sustainability in sectoral rules – delegated acts under AIFM, UCITS and MiFID II require the integration of sustainability risks and clients’ sustainability preferences into governance, product design and suitability assessments.

Access to sustainable finance is strong and steadily improving. Since 2018, the market has expanded markedly, with Danish financial institutions playing a pivotal role in financing the green transition. The product set has broadened to include both green loans – whose proceeds are earmarked for eligible sustainable projects – and sustainability-linked facilities, in which pricing is contingent on the borrower’s performance against defined sustainability KPIs. In both structures, success depends on setting clear, credible targets, maintaining robust documentation, securing independent verification and embedding obligations firmly and unambiguously in the loan documentation.

Bond markets are also gaining momentum across both use-of-proceeds and sustainability-linked formats, supported by rapidly evolving EU frameworks that enhance reporting, comparability and transparency. Public authorities can further accelerate supply through co-ordinated fiscal measures, tax incentives and targeted industrial policy.

Beyond product development, the sector is shaping real economy outcomes through active ownership on the investment side and sustained, solutions-oriented dialogue with clients on the financing side. Together, these channels are reinforcing market discipline, improving data quality and helping to translate sustainability commitments into measurable impact.

The shift to ESG presents several transition risks. As carbon prices rise and regulatory and efficiency standards tighten, oil, gas and other energy intensive assets risk becoming stranded. Borrowers in the industrial, transport, agriculture and real estate sectors may face higher operating costs, enhanced disclosure requirements and reduced credit availability if their transition strategies are weak or unconvincing. A growing share of companies may become non-bankable, particularly high-emission businesses lacking credible decarbonisation plans and SMEs with insufficient or poor-quality data.

A 2025 report by Danmarks Nationalbank highlights several structural frictions that continue to complicate sustainable finance, including the following:

• the limited availability and consistency of data on “green” investments exacerbate information asymmetries, impeding banks’ and investors’ ability to price and manage risk effectively;
• there is a persistent mismatch between many investors’ short-term return horizons and the inherently long-dated nature of green infrastructure assets such as power grids and wind farms; and
• high upfront capital requirements elevate perceived risk and can deter financing of otherwise sound projects – a challenge that is particularly acute for infrastructure, where initial funding needs are substantial and payback periods are extended.

Soft law is increasingly hardening into binding rules in Denmark, largely through EU measures that convert voluntary ESG frameworks into mandatory obligations. To supplement OECD and UN standards such as the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, the EU has adopted regulations establishing value chain duties focused on human rights and environmental impacts. As these measures are implemented, Denmark will see more sustainability requirements incorporated into national law. These rules will continue to coexist with soft law instruments, including the Danish Recommendations on Corporate Governance.

At the same time, soft law is gaining legal force contractually. Many companies build global initiatives such as the UN Global Compact into contracts and marketing; once incorporated, they create binding obligations under national contract law. In this way, soft law continues to shape legal duties, even as hard law mandates expand.

In Denmark, value chain due diligence has gained prominence as scrutiny and societal expectations rise. Companies are expected not only to manage their own ESG impacts, but also to address risks across their value chains.

This can be seen, for example, in the way companies choose their supply chain partners (see 4.3 Partner Selection), in their external communication and marketing practices, and in their product development. It is also relevant for companies to consider how their products are produced in terms of human rights and environmental considerations, health and safety risks, etc.

The CSDDD – not yet in effect, with a transposition deadline of July 2027, and first companies coming within scope from July 2028 – will heighten due diligence obligations across value chains. It imposes duties regarding actual and potential human rights and environmental adverse impacts in a company’s own operations, its subsidiaries and its chains of activities (Article 1(a)). It also requires climate transition plans and introduces liability for breaches of these obligations (Articles 1(b) and 1(c)), effectively raising due diligence expectations at all tiers of the value chain.

If adopted, the proposed Omnibus package could narrow these requirements. The Commission has suggested limiting value chain due diligence largely to direct business partners and simplifying the concept of stakeholders to workers and their representatives, and individuals and local communities whose rights and interests are directly affected by a company’s activities or those of its direct partners.

As outlined in 4.1 Soft Law Becoming Hard Law and 4.2 Towards Vertical Responsibilities, evolving societal expectations and tighter EU regulation are reshaping how companies select and manage supply chain partners. As with the broader value chain, it is no longer sufficient to ensure only one’s own compliance with sustainability and human rights standards: companies must also demonstrate that they hold suppliers to defined ESG requirements, both to meet stakeholder expectations and to mitigate counterparty risk.

Geopolitical volatility – accelerated by the COVID-19 pandemic – has also driven a shift from reliance on a few large global suppliers to more diversified, regionally distributed networks. By broadening their supplier base across geographies and competencies, companies enhance resilience and can respond more quickly to disruptions in specific regions.

Forthcoming EU rules – particularly the CSDDD and, to a degree, the CSRD – are expected to intensify due diligence when screening suppliers, with heightened focus on environmental, governance and human rights risks. These expectations are likely to be reflected in contractual terms, with explicit ESG obligations incorporated to ensure supply chain compliance.

As discussed in 4.2 Towards Vertical Responsibilities, in principle the CSDDD would shape supplier selection by imposing obligations regarding actual and potential adverse human rights and environmental impacts across business partners in the chain of activities (Article 1(a)). However, in light of the Stop-the-Clock Directive and the Omnibus package, the CSDDD’s obligations are postponed until July 2027 and may be diluted. It therefore remains uncertain whether the CSDDD will materially change supplier selection practices or merely codify due diligence measures already adopted by many large companies.

ESG has become a core consideration for companies, and now features prominently in M&A strategy and due diligence. In practice, ESG influences each stage of the deal lifecycle in the following ways.

• Deal sourcing and screening – buyers increasingly use ESG criteria to identify targets with aligned values and operating models while filtering out businesses with outsized environmental, social or governance liabilities.
• Valuation and pricing – robust ESG performance can support valuation premiums and more favourable structures. Conversely, weak ESG profiles often lead to price discounts, tighter holdbacks, earn-outs tied to remediation, or enlarged escrows.

• Due diligence and documentation – ESG due diligence has become standard. Findings directly inform representations and warranties, interim and post-closing covenants, indemnity packages and closing conditions, including requirements to remediate identified risks.
• Regulatory and policy exposure – evolving disclosure, supply chain, human rights and product-related rules shape clearance prospects, compliance costs and forward capex plans. These dynamics can materially affect deal timing, execution certainty and integration planning.
• Financing and cost of capital – lenders and underwriters increasingly link pricing and availability to ESG performance and KPIs. Stronger ESG profiles can improve terms, widen syndication appetite and diversify funding sources.
• Limits and trade-offs – ESG does not override commercial fundamentals. Data quality and comparability can vary, and in distressed, highly competitive or expedited processes, ESG may be scoped to material issues or addressed post-closing.

In the EU, the CSRD is particularly relevant to M&A due diligence. The CSRD applies to large and listed companies, and requires extensive sustainability reporting aligned with prescribed standards. For in-scope companies, it is especially important to integrate ESG considerations into due diligence, as they must report on sustainability strategies, risks, opportunities, governance and metrics. This obligation creates a strong incentive to identify ESG compliance gaps, risk exposures and value creation opportunities in potential targets, and to ensure that post-closing reporting and controls can meet CSRD requirements.

The main distinction between the companies in Denmark that are required to make ESG disclosures and those that are not is the size of the company. Large companies that fulfil at least two of the following criteria are considered large enterprises under Section 7(2) of the Financial Statements Act:

• the company has a balance of more than DKK195 million for two consecutive fiscal years;
• the company’s net revenue is more than DKK391 million for two consecutive fiscal years; or
• the company has more than 250 full-time employees on average during these years.

If at least two of the above criteria are fulfilled, the company is required to make ESG disclosures, under Section 99a of the Financial Statements Act.

In addition to this category of large companies, Section 99a also encompasses all state-owned stock companies and all listed companies, meaning these are all required to make ESG disclosures with their financial reporting as well.

According to Section 99a(1), the sustainability report must include information necessary to understand the enterprise’s impacts on sustainability matters and how sustainability matters affect the enterprise’s development, performance and position. This is specified further in Section 99a(2), which states that the information mentioned in Section 99a(1) must contain the following information.

• A brief description of the enterprise’s business model and strategy, including:
1. the resilience of the enterprise’s business model and strategy to risks in relation to sustainability matters;
2. the opportunities for the enterprise in relation to sustainability matters;
3. the enterprise’s plans, including implementing actions and related financial and investment plans, to ensure that its business model and strategy are in line with the Paris Agreement and the objective of achieving climate neutrality by 2050;
4. how the enterprise’s business model and strategy take account of the interests of the enterprise’s stakeholders and of the enterprise’s impacts on sustainability matters; and
5. how the enterprise’s strategy has been implemented with regard to sustainability matters.
• A description of the time-bound targets relating to sustainability matters set by the enterprise.
• A description of the enterprise’s policies in relation to sustainability matters.

The reporting requirements in the Financial Statements Act are reflections of those listed in the CSRD.

Because the regulations regarding ESG disclosures set out in the Financial Statements Act (Arsregnskabsloven) are transposed from the CSRD, the obligations that apply to companies in Denmark to publish transition plans or to commit to targets are the same as those that apply to companies in other EU states.

For example, companies subject to the CSRD and those subject to the Financial Statements Act are required to disclose (translation) “the plans of the undertaking, including implementing actions and related financial and investment plans, to ensure that its business model and strategy are compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °C in line with the Paris Agreement … and the objective of achieving climate neutrality by 2050, as established in Regulation (EU) 2021/1119 of the European Parliament and of the Council, and, where relevant, the exposure of the undertaking to coal-, oil- and gas-related activities”.

Another obligation for ESG reporting regarding commitment to targets set out in the CSRD is “a description of the time-bound targets related to sustainability matters set by the undertaking, including, where appropriate, absolute greenhouse gas emission reduction targets at least for 2030 and 2050, a description of the progress the undertaking has made towards achieving those targets, and a statement of whether the undertaking’s targets related to environmental factors are based on conclusive scientific evidence”.

The CSDDD implements an “obligation for companies to adopt and put into effect a transition plan for climate change mitigation which aims to ensure, through best efforts, compatibility of the business model and of the strategy of the company with the transition to a sustainable economy and with the limiting of global warming to 1.5°C, in line with the Paris Agreement”.

With the “Stop-the-Clock” Directive, the transposition deadline and the first phase of the application covering large companies has been postponed by one year, so this obligation is not yet in effect. If the Omnibus package is adopted as proposed by the Commission, this obligation to adopt and put into effect a transition plan for climate change mitigation will be replaced with softer wording aimed at ensuring that reporting is the only requirement.

Under Danish law, a new provision of the Marketing Practices Act, effective September 2026, will regulate when companies may use environmental claims about future environmental performance in their marketing. To make such a claim, a company must adopt clear, objective, publicly available and verifiable commitments set out in a detailed and realistic implementation plan. That plan must include measurable, time-bound targets and any other elements necessary to support implementation, and it must be regularly verified by an independent third-party expert, with the expert’s conclusions made available to consumers. Any claim about future environmental performance that does not meet these requirements will be considered misleading marketing.

In Denmark, strict rules apply to ESG claims under the Marketing Practices Act and EU legislation, including the new Empowering Consumers for the Green Transition Directive (see 1.1 General ESG Trends). The Marketing Practices Act, for example, prescribes in Section 13 that a company must be able to document the accuracy of information about factual circumstances. It further follows from Section 5 that a company’s marketing must not include incorrect information nor mislead consumers in any way; this also applies to ESG claims. Companies must not present material information in an unclear, incomprehensible, ambiguous or inappropriate manner (see 6. Climate and ESG Litigation).

This legislation is also supplemented by the DCO’s Guidelines from October 2024 (see 6.3 Greenwashing). ESG claims must be true, specific and supported by verifiable evidence, often life cycle-based. Vague statements such as “green”, “environmentally friendly” or “sustainable” are generally prohibited. The overall performance of the product or company must not be exaggerated, and the scope, conditions, timeframe and methodology of the claim must be clearly stated.

There is extensive practice from the DCO on ESG claims where companies have been found to act in contravention of the requirements in the Marketing Practices Act and the DCO Guidelines. One example is BMW Denmark’s use of statements such as “World’s most sustainable car manufacturer” and “There is sustainability in every car manufactured by BMW” (English translation), which led the DCO to file a complaint with the police that BMW were violating rules in the Marketing Practices Act, including those mentioned above. BMW accepted a fine of DKK3 million in December 2024.

In September 2026, the Marketing Practices Act will be amended to regulate the use of ESG/sustainability labels. Annex 1 (the list of practices deemed misleading or aggressive per se) will be updated to provide that the display of any sustainability label not based on a certification scheme or established by a public authority is always misleading.

There are several regulators in Denmark that monitor ESG compliance and the use of ESG-related claims; see 1.5 Government and Supervision.

Legal penalties related to Danish ESG obligations can be summarised as follows.

• The Financial Statements Act, Section 11(1) – failure to comply with sustainability reporting requirements are generally punishable by fine.
• The Capital Markets Act – breaches of disclosure requirements may lead to significant penalties, including fines and, in certain cases, imprisonment.
• The Financial Statements Act, Section 99a – failure to comply with sustainability reporting requirements may be punishable by a fine imposed on the company and on members of management for failing to ensure compliance. The Danish Business Authority may also impose periodic penalty payments and issue corrective orders.
• The Marketing Practices Act – violations are punishable by a fine or imprisonment for up to four months (for individuals) under Section 37. Fine levels depend on the nature, gravity, scale and duration of the infringement, with turnover considered in assessing fines. Since January 2022, fine levels for companies with annual turnover above DKK500 million are calculated as follows:
1. reduced fine level: DKK50,000 to DKK500,000;
2. normal fine level: DKK500,000 to 1% of turnover up to DKK1 billion, plus 0.1% of turnover above DKK1 billion; and
3. increased fine level: 1% of turnover up to DKK1 billion, plus 0.1% of turnover above DKK1 billion.

A 2025 Danish survey on ESG by Lederne, EY and Danske Bank highlights that only a limited number of companies expect to halt their ESG efforts as a result of the EU’s Omnibus proposal. This indicates that ESG is a core part of corporate strategy and the business model, rather than merely a compliance requirement. Moreover, 48% of leaders familiar with the Omnibus proposal say they intend to maintain or increase their ESG efforts.

Companies are working to strengthen internal reporting systems, develop standardised processes for ESG data, and improve the quality and reliability of information, including supply chain data.

Despite this progress, companies face several notable challenges. Regulatory uncertainty remains a major barrier, as EU directives and national regulations are complex and sometimes inconsistent, making it difficult for businesses to plan long-term ESG reporting strategies. Accurate data collection is another challenge, particularly for environmental metrics such as CO₂ emissions and social metrics such as labour practices across the supply chain. In addition, many companies – especially smaller ones – struggle with limited internal resources, expertise and systems to implement comprehensive ESG reporting.

Danish law offers several causes of action that can be used to pursue ESG-related claims against companies.

Management Liability

As a rule, members of a company’s management will be individually liable for the accuracy of the company’s sustainability reporting in the annual report (Section 8(2) of the Financial Statements Act). It therefore cannot be ruled out that a company’s management may face claims as a result of deficient reporting under Section 99a of the Financial Statements Act, nor can it be ruled out that a company may face claims for failure to comply with its obligations under the CSDDD.

The Marketing Practices Act

Companies that mislead consumers – for example, through greenwashing claims – may incur liability for non-compliance with the provisions of the Marketing Practices Act.

Complaints to the DCO and the Danish Financial Supervisory Authority

Consumers can file complaints with the DCO or with the Danish Financial Supervisory Authority (DFSA) if the complaint regards a financial company. The DCO accepts complaints regarding a company’s marketing practices, unfair trade practices, unfair contractual terms, etc. The DFSA exercises supervision of the actors in the financial markets in Denmark and monitors compliance with the capital markets regulations. A complaint to the DFSA can lead to an investigation of the practices of a company the complaint regards, and it can result in the DFSA issuing an order or a reprimand, or, in some serious cases, the filing of a police report.

General Tort Law

If the general conditions for liability are met and the injured party can meet the burden of proof, a (climate) lawsuit may be filed. The conditions for liability in Danish law are that there must be:

• a basis for liability;
• a provable loss;
• causation between the unlawful act or omission and the loss; and
• foreseeability.

In Danish law, fault (culpa) is the general standard for liability. In climate cases, however, it can be difficult to establish that all conditions for liability are met. In practice, for example, it is often challenging to prove a causal link between a company’s lack of climate policy and a provable loss.

In addition to the need for a legal basis, there may also be certain procedural challenges involved in bringing a climate case before the Danish courts.

Legal proceedings may only be instituted if the claimant has a legal interest in the case. This means that the following three conditions must be met:

• the plaintiff’s claim is lawful and can be adjudicated;
• the plaintiff’s claim is current; and
• the plaintiff has a concrete/actual interest in the case.

Because climate cases are typically complex, involve multiple parties and extend over long periods of time, it can be difficult to meet these three criteria.

Cases concerning violations of the Marketing Practices Act can be brought by several parties, as follows.

• The DCO:
1. civil enforcement – ban, injunction, damages or reasonable compensation;
2. criminal enforcement (the Prosecution service) – filing a police report, resulting in fine or imprisonment; and
3. the DCO may act as group representative in both opt-in and opt-out collective proceedings.
• Consumer organisations:
1. civil enforcement – ban, injunction, damages, reasonable compensation or action for a declaration.
• Consumers:
1. civil enforcement – ban, injunction, damages, reasonable compensation or action for a declaration.
• Competitors:
1. civil enforcement by way of litigation; or
2. criminal enforcement by way of private prosecution – this is possible for violations of the Marketing Practices Act (Sections 20(1) and 20(3)), consisting of a company’s harmful publicity about another company or commercial practices that mislead in a way that could be assumed to influence the economic behaviour of other companies or harm a competitor (Section 37(5) of the Marketing Practices Act).

NGOs and activists are relevant stakeholders in Denmark. They can file complaints with the DCO and may thereby trigger regulatory scrutiny. If they can demonstrate legal interest (as described in 6.1 Instruments for ESG Litigation), they may also bring civil actions against companies. Section 32 of the Marketing Practices Act gives trade and consumer organisations the right to bring legal action for violations of the Act.

This was the case in the first climate lawsuit in Denmark, which was decided in 2024 (published in UfR 2024.4356 H). The Vegetarian Society of Denmark and the Danish Climate Movement sued Danish Crown (a global food processing company), seeking to prohibit the use of the statements “Danish pig is more climate-friendly than you think” and “Climate-controlled pig” in its marketing. The two non-profit organisations argued that the statements constituted a clear violation of Section 5 of the Marketing Practices Act. The High Court partly upheld the claims of the Danish Vegetarian Association and the Climate Movement in Denmark.

A significant number of complaints to the DCO also come from consumer organisations, with 66 of the inquiries received in 2024 coming from consumer groups and organisations.

In Denmark, investors may bring actions for misleading ESG claims – eg, in cases of greenwashing. So far, no investor claims are known to have been made in Denmark. Most greenwashing cases are initiated by the DCO, which has been highly active in this area in recent years.

In 2024, this heightened focus reached a new peak as the DCO received a record number of consumer complaints related to greenwashing, leading to the initiation of 162 cases. Three companies were reported to the police, 14 were formally warned after the DCO found that the rules had been violated, another 59 were informed about the applicable requirements, and two companies were issued fines totalling several million krone.

In October 2025, a Danish company was fined DKK3.5 million (approximately EUR468,475) for violating the Marketing Practices Act by greenwashing. The company had marketed its wood pellets with statements such as “CO2-neutral wood pellets” and “sustainable wood pellets”, and had used labels containing “a sustainable choice”, “CO2-neutral” and an illustration of a green tree. The DCO found that these elements could give consumers the impression that burning the pellets would not emit CO2 or would have a smaller environmental impact than in reality, and that wood pellets are sustainable. The DCO also stated that highlighting environmental benefits resulting solely from legal requirements is misleading. The DCO therefore pressed criminal charges, and the company accepted the fine.

In June 2025, Royal Unibrew was fined DKK4 million (approximately EUR535,400) for greenwashing. Royal Unibrew had labelled its cans “CO2-neutral”. The product was technically CO2-neutral, but only because the company purchased credits in climate compensation projects. This information should have been disclosed, as such credits do not make the product less harmful to the climate. Since this information was omitted, the “CO2-neutral” claim was considered misleading. The DCO pressed criminal charges, and the company accepted the fine. This case illustrates that even companies pursuing positive environmental initiatives must be cautious in how these are used in marketing.

In Denmark, ESG-related proceedings are set to increase.

Danish organisations are notably active in addressing greenwashing, which has sharpened regulatory focus. The Danish Consumer Council (Forbrugerrådet Tænk) plays a central role by systematically monitoring corporate sustainability claims and reporting suspected misrepresentations to the DCO. These efforts have already led to a significant number of matters being referred to the DCO.

Globally, climate activism increasingly turns to litigation, and Denmark is unlikely to be an exception. More cases are expected to reach Danish courts and to concern Danish companies’ activities both domestically and abroad.

Against this backdrop, there is likely to be continued growth in investigations, administrative actions and civil or criminal proceedings relating to ESG claims.