Why sustainability features prominently in ProRail's annual report

According to Bas Ringnalda, finance manager at ProRail, the organization was aware of the importance of reporting on sustainability at a very early stage. ‘As early as 2013, we incorporated the non-financial reporting guidelines (Global Reporting Initiatives, ed.) into our annual report. And we decided to have an external audit done on the annual report. This is something that stands out within the public sector. Within the semi-public sector, there has been more attention to GRI in recent years. Our motivation was actually very data-driven. We were already using data within the organization for some time to make topics discussable. We also wanted to bring out that transparency in the annual report.'

In our last annual report, we brought the materiality analysis - containing the outcome of the material themes and thus the elements of our focus of our sustainability policy - to the front of the report. In previous years, that analysis was more or less in the appendix. That was then to justify it. Now they are prominent topics on which we can steer as an organization. Topics that are also important to our external stakeholders. In addition to the material topics in our annual report, together with Rijkswaterstaat we recently paid attention to mobility from the perspective of broad welfare. Together with Rijkswaterstaat, we have paid a lot of attention to the degree of impact mobility has on society.'

ProRail is currently preparing to formally comply with CSRD by 2025, the new European directive that requires large companies to report on their impact on people and the environment. 'This means we want to take as many steps as possible to achieve that goal by early 2024’, says Ringnalda. 'We are now in the phase of doing the dual materiality analysis, the organization's impact measurement on people and the environment and the material opportunities for the organization, ourselves. We do that because we want to experience ourselves what is needed and, incidentally, we do not underestimate that we still have enormous steps to take when it comes to that double materiality analysis. Because the CSRD must be visibly reflected in policy, strategy, and systems.’

What motivates ProRail to be so motivated to get started with the CSRD, where most companies in the public sector still have cold feet? 'We do not conduct the materiality analysis just so we can create a fancy and informative annual report in early 2026. We use it primarily to have the conversation with our internal and external stakeholders. From those conversations, we extract important topics that should be part of our strategy and sustainability policy. This influences how we act as an organization. The better you define the topics internally, the more effect that has on where you spend your time as an organization,' Ringnalda explains.

As a large organization, ProRail works with other companies and suppliers. All are part of the sustainability chain and face the same CSRD challenges. Ringnalda agrees: 'For us, our suppliers are a relevant partner for successful CSRD implementation, because they too need to have the sustainability processes in order. They too work with smaller suppliers who are indirectly our suppliers again. It is quite complex'.

Denise Kors, Tax Director at PwC, recognizes this image in conversations with institutions in the public sector: 'They are searching in terms of the various sustainability initiatives. Which initiatives are we prioritizing and spending money, time, and energy on? That's the beauty of the legal framework. Use that as a funnel to arrive at the right capstone, the most impactful themes, and work from there.'

Kors is curious to know how ProRail deals with large contracts in this context, whether any procurement conditions are set when it comes to sustainability. Ringnalda: 'Everything with us is virtually subject to tendering, meaning that we include sustainability in our procurement requirements. So many sustainability components are included in our tendering process and we require the same from our partners. But we certainly still have steps to take to secure CSRD requirements in our agreements.’

The EU's CSRD ambition to make European companies more sustainable is quite a task for business. Kors also sees this in her practice at PwC: 'If we look at the status of legislative developments, sustainability reporting becomes mandatory mainly for listed companies and large private companies. Legal forms in which the public sector mainly operates, such as foundations, associations and independent administrative bodies, do not as yet have this reporting obligation.’

Although it is still unclear when this does become an obligation, Kors does stress the importance of sustainability reporting within the public domain. "We believe that more transparency is allowed there.

According to Ringnalda, several public sector stakeholders are also working on CSRD implementation, creating cross-fertilization. 'You don't have to do it yourself, but together you contribute to sustainable progress.'

Kors: "I truly believe in dialogue. How do we improve things in collaboration. Not just from a data or compliance perspective, but real concrete plans for sustainability. That is what I wish for the whole sector. Especially given the role it plays, both from the environmental and social side. The challenges in this are major. Think about personnel and sustainable employability, the shortages within healthcare and education. Yes, data are available, but the solution is complicated.'

Ringnalda thinks that if you introduce organizations in the public domain to the CSRD step by step, you will go a long way. 'Try to start by being accountable for topics that are important to the sector. Start with the internal accountability, then you immediately have the focus as an organization on the important topics. Sustainability reporting is a careful process, not something you just do in two years.'