ESG

Corporate Social Responsibility in the Netherlands

The focus on ESG didn’t just suddenly appear in boardrooms. The millennial generation is deeply attuned to these issues and is thus compelling companies to rethink their approach. Nor did millennials simply pull these issues out of thin air. The current broad debate has deep historical roots. The most successful large corporations were already reflecting on their social responsibilities decades ago. For example, during the Industrial Revolution in the Netherlands, Philips and Heineken took care of their employees by providing them with housing. Entire neighborhoods in Amsterdam (Heineken) and Eindhoven (Philips) were built this way.

Corporate Social Responsibility in an International Context

More recently, on June 23, 1999, the House of Representatives organized a debate titled: “Corporate Social Responsibility in an International Context.” The discussion centered primarily on whether the government should play a role in compelling companies to engage in corporate social responsibility (CSR), or whether this was the responsibility of companies—and the government primarily had a role in the international debate on impact. A number of terms were already associated with CSR at that time: corruption, the environment, working conditions, and so on. SMEs usually talked about sustainable business practices, while large corporations opted for CSR. In the years that followed, CSR would be explored in depth across many different areas. With the Corporate Governance Code for good governance, the Netherlands adopted a code of conduct (self-regulation) for publicly traded companies in 2003. But consider, for example, the Climate Agreement, which was established through consultation between companies, interest groups, and the government. Internationally, the Organization for Economic Cooperation and Development (OECD) introduced ISO 26000 in 2010: an international standard for corporate social responsibility, complete with practical guidelines. Legislators worldwide also introduced stricter laws regarding corruption, the environment, employee exploitation, and so on.

Sustainable business no longer on the agenda

The thinking behind CSR ran parallel to the shareholder model. The shareholder model assumes that, in the end, the stock price always reflects the long-term behavior of corporate leaders. In other words: if directors act in the best interests of their customers, as well as their employees and other stakeholders, over the long term, this will be reflected in the stock price. However, this line of thinking would prove to be flawed. First of all, because not all directors always have the best interests of the rest of the world at heart. But also, and above all, CSR would often become more of a “must” for companies than a genuinely embraced management priority. Many companies appointed a chief sustainability officer, or similar, whose job was to ensure the company didn’t go off the rails. And that was the end of it. What’s more: as soon as the economy faltered or shareholders grumbled, a topic like sustainable business often disappeared entirely from the agenda.

The Introduction of the Sustainable Development Goals

That has changed in recent years. This shift was driven by societal pressure, as described above, but there is more to it. The United Nations perfectly captured the spirit of the times and introduced the United Nations Sustainable Development Goals (SDGs) in 2015. In English, this translates to Sustainable Development Goals. The SDGs are social goals such as zero hunger, no poverty, and clean water and sanitation for all. The goal is to have implemented this agenda by 2030. These SDGs have sparked a revolution in the business world. Whereas CSR was rarely, if ever, on the corporate agenda, the United Nations’ goals are so ambitious that large companies can perfectly align their strategy (and nowadays often their mission as well) with them. The shareholder mindset is increasingly being replaced by a strategy based on long-term value creation. Significant strides are now being made in implementation. Social impact and sustainable business practices are now high on the agenda. Think of trends such as integrated reporting, an ESG policy, or sustainable innovations.

CSRD and Reporting on ESG Targets

Reporting on ESG targets is not optional. Companies are increasingly being required to do so. As early as the 1990s, some companies began publishing environmental or sustainability reports. In 2022, the European Corporate Sustainability Reporting Directive (CSRD) was enacted, which took effect in 2024. However, under pressure from significant deregulation in the United States, a legislative package was adopted by the EU in 2025 to simplify European rules and thereby boost competition with the U.S. A “Stop-the-clock” proposal was also submitted to postpone the implementation of upcoming phases of the CSRD by two years. And so, even ESG policy is not immune to geopolitical pressure.