The Minister of Economic Affairs recently sent the research report commissioned by Empact to the Ministry to the Lower House of Parliament. The research conducted by Empact answers the question of what the effect is of the Dutch Government setting conditions in the field of International Corporate Social Responsibility.
The objective of the Dutch and European governments is that companies do business fairly. Companies can achieve this by setting up a Due Diligence process within the company. A well-executed Due Diligence process ensures that a company is aware of human and environmental risks in the supply chain and takes action accordingly. The idea behind companies taking this responsibility is that this leads to better (resilient) business operations and the prevention of abuses in the chain such as exploitation of workers and causing environmental pollution.
The Dutch government is encouraging international corporate social responsibility (IMVO) by asking companies to follow OECD guidelines. A pilot by the Ministry of Economic Affairs (EZ) and the Netherlands Enterprise Agency (RVO) examined how IMVO conditions could be integrated into government support instruments. The pilot, with 14 instruments that together funded €5 billion in 2022 was implemented from 2021 through 2023.
Key findings from the study:
- Information and communication: Passive communication (such as through websites) had little effect, while personal contacts were more effective in raising IMVO awareness.
- Implementation challenges: Incorporating IMVO requirements proved difficult due to internal constraints such as lack of priority, legal ambiguity, and regulatory burden concerns.
- Impact on CSR: The level of knowledge about CSR among officials increased, but implementation dilemmas such as time constraints and lack of clarity about due diligence hindered progress.
- Company expectations: Companies support IMVO conditions provided they are proportional, clear and tailored. They call for risk approaches based on company size, sector and scale of support.
Based on the research findings, Empact provided the Minister with a number of recommendations that future policy can take into account:
- Standardization: Extend CSR education to all EZ instruments and prepare companies for legislation such as the EU Corporate Sustainability Due Diligence Directive (CSDDD).
- Customization: Base IMVO conditions on risk approaches, focusing on major risks.
- Stick to built-up policies: Focus support on resolving IMVO risks in value chains and collaborate with other IMVO initiatives.
- Follow-up research: corporate behavior and attitude research, legal analysis and effective communication.
The report emphasizes the importance of a growth path for IMVO, cooperation and a phased approach pending European regulations. In the accompanying letter the Minister sent to the House of Representatives, the Minister writes that Empact’s findings and recommendations will be taken into account in determining the way forward.
Read more at the House of Representatives website: https://www.tweedekamer.nl/kamerstukken/brieven_regering/detail?id=2024Z20520&did=2024D48387