It is companies' turn to take the lead in climate policy

After the fall of the cabinet, a broad coalition of nature, agriculture and business organisations, trade unions and energy companies made an appeal to politicians to continue pursuing climate policy. The organisations want to prevent the policy from coming to a standstill because of the cabinet's outgoing status and the possibility of topics being labelled  as controversial.

We support this call: the government, citizens and companies need a clear sustainability policy for the short, medium and long term. For example, making the energy system more sustainable, including the full power grid, requires a proactive approach. We call on companies to continue to push ahead with their own sustainability plans.

Government has cycled in the lead by imposing CSRD  

Anyone who cycles on the peloton knows that at some point everyone is expected to take over the lead. The government has cycled in the lead in recent years by imposing a wave of regulations on business, one of the most far-reaching of which is the European Corporate Sustainability Reporting Directive (CSRD). 

This directive, which takes effect for the largest, publicly traded companies as early as fiscal year 2024, requires companies to report on their human, environmental and climate impact. CSRD reveals to everyone where and how big their impact is. But it also leads to organisations themselves gaining that insight. Many organisations do not always have that insight, and certainly not fully. 

Companies need insight to gain visibility into impact 

In a recent report based on interviews with companies across the value chain of the agrifood sector, we looked for inspiring examples about making those companies more sustainable. The interviews revealed that companies are eager to take steps and are taking action. But they need insight to clarify their role in the chain and to be able to set goals to reduce negative impact and increase their positive impact. This also applies to setting up processes and governance that support the sustainability strategy. However, this is relatively new territory for many; there is not yet a handbook or guide with some proven actions that anyone can successfully implement. And so it involves trial and error and experimentation.

The Corporate Sustainability Reporting Directive (CSRD) is a key 'driver' for getting that insight 

You could say that companies are putting their first puzzle pieces in place to gain this insight. This then enables them to connect the puzzle pieces of their suppliers and customers to achieve a sustainable supply chain. CSRD is by no means the only driver, but it is an important one. In this regard, reporting is not an end in itself, but should help provide the insights needed to know where things must and can be done better in an organisation and in their role in the chain. In short: the government has cycled ahead for a while, now companies have to take over the lead to put that sustainability puzzle in place.

Very unfortunate when companies wait and see 

Companies are becoming increasingly aware of the importance of sustainability and the existential risks associated with it. However, it has taken a long time for that awareness to really take hold. In practice, we have seen a lot of ‘wait and see’:  wait and see within one's own organisation, wait and see within sectors, wait and see with the government. It is easy not to move because others are not doing the same and thus wait and see. That can have a paralysing effect. It would be very unfortunate if companies now wait again for a new government to take further steps. Especially because they can simply continue on the same path.

Sustainability touches business continuity

Moreover, they themselves have every interest in doing so. The interviews we conducted in the agrifood sector show that all organisations see the transition to sustainable business models as a way to be resilient in the future and to maintain their right to exist. According to the Dutch Corporate Governance Code, the board of a company is responsible for the continuity and sustainable, long-term value creation of a company. This value creation is important for shareholders and other stakeholders, and even more so for future generations and their food supply.  All the more reason to keep going.