Empact Research Report to the Dutch Parliament

The Minister of Economic Affairs recently submitted the research report prepared by Empact, commissioned by the Ministry, to the Dutch Parliament. The research conducted by Empact addresses the question of the impact of setting conditions by the Dutch government in the area of Responsible Business Conduct (RBC).

The goal of the Dutch and European governments is to encourage businesses to conduct fair and responsible trade. Companies can achieve this by implementing a “due diligence” process within their operations. A well-executed due diligence process ensures that a company identifies and addresses risks related to human rights and the environment within its supply chain. The idea behind businesses taking this responsibility is to create a more resilient operational model while addressing issues such as worker exploitation and environmental damage.

The Dutch government promotes Responsible Business Conduct (RBC) by encouraging companies to adhere to the OECD guidelines. A pilot conducted by the Ministry of Economic Affairs (EZ) and the Netherlands Enterprise Agency (RVO) explored how RBC conditions could be integrated into government support instruments. The pilot, involving 14 instruments that collectively financed €5 billion in 2022, was carried out between 2021 and 2023.

Key findings from the research:

  • Information and communication: Passive communication (e.g., via websites) had limited impact, whereas personal contact proved more effective in raising awareness.
  • Implementation challenges: Incorporating conditions proved difficult due to internal limitations such as lack of priority, legal uncertainties, and concerns about regulatory burdens.
  • Impact on RVO: While knowledge of RBC among officials increased, implementation challenges, including time constraints and unclear due diligence requirements, hindered progress.
  • Business expectations: Companies support RBC conditions as long as they are proportional, clear, and tailored. Businesses favour risk-based approaches based on company size, sector, and the amount of support provided.

Based on the research findings, Empact made several recommendations to the Minister for consideration in future policy:

  • Standardisation: Expand Responsible Business Conduct  information campaigns to include all EZ-instruments and prepare companies for legislation such as the EU Corporate Sustainability Due Diligence Directive (CSDDD).
  • Customization: Base RBC conditions on risk assessments focusing on significant risks.
  • Building on existing policies: Focus support on addressing Human Rights and Environmental risks within supply chains and collaborate with other RBC initiatives.
  • Follow-up research: Conduct studies on company behavior and attitudes, legal analyses, and effective communication strategies.

The report emphasizes the importance of a growth trajectory for RBC, collaboration, and a phased approach in anticipation of European regulations. In the accompanying letter to the Dutch Parliament, the Minister noted that the findings and recommendations from Empact will be considered when determining next steps.

Read more on the Dutch Parliament’s website:

https://www.tweedekamer.nl/kamerstukken/brieven_regering/detail?id=2024Z20520&did=2024D48387

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