Every year on the third Tuesday of September, the Dutch government unveils its plans and budgets for the upcoming year(s). This year's presentation is particularly notable, as it represents one of the first opportunities for the new government to share their plans for the country. The coalition agreement outlines the current coalition's viewpoints and priorities, offering crucial insights into their approach. In this article, we will focus on the implications of these priorities for businesses from an ESG perspective. RSM has already conducted a thorough analysis of the plans from a tax point of view, which you can find here. In this article, we will explore the government's key priorities related to ESG, their potential impact on businesses’ ESG initiatives and activities, and strategies for navigating these emerging challenges.

This article is written by Bart Ladru ([email protected]), Kirill van der Velde ([email protected]) and Iman Zalinyan ([email protected]). Bart, Kirill and Iman are part of RSM Netherlands Business Consulting Services with a specific focus on Sustainability and Strategy.

The perspective of the current coalition on ESG/Sustainability 

A change in the perspective of the government on climate action can be identified: there is a clear goal to align the sustainable transition more closely with economic prosperity, as is also indicated by the new ministry's title: Climate and Green Growth. Correspondingly, there is a strong emphasis on innovation and attracting investments as key strategies to tackle climate challenges. While most climate commitments, policies and objectives of the previous coalition remain in place, a more pragmatic approach to ESG and sustainability can also be observed. The current government emphasizes the importance of consistent climate policy, allowing businesses to anticipate changes and plan their transitions accordingly. In this context, the government aims to uphold commitments to the Paris Agreement and maintain existing objectives outlined in EU and national climate laws. The energy transition and resolving net congestion continue to be top priorities. RSM has previously conducted an in-depth analysis of the EU Energy transition, which can be found here.

The approach of the current Dutch government towards the highly discussed Corporate Sustainability Reporting Directive (CSRD) from the EU Green Deal remains a topic of significant interest. As deadlines loom for EU companies to begin fulfilling their reporting obligations, the Dutch government has yet to officially incorporate the CSRD into national law. In contrast, countries such as Italy, France and Croatia have already adopted the directive.

Considering these factors, the new government’s approach remains largely consistent with past commitments but reflects a shift in mindset towards balancing sustainability with economic considerations. While the core climate goals are upheld, policy adjustments in the 2024 agenda show a tendency to slightly scale back ambitions or make implementation less stringent. The following section will explore these changes and their implications.

The biggest changes for businesses from an ESG perspective 

The Dutch climate policy is shifting towards more pragmatic and EU-aligned approaches, focusing on compliance rather than exceeding EU standards. Key changes include an increased emphasis on nuclear energy, hydrogen, and carbon capture and storage (CCS) technologies (although €1.2 billion is cut from hydrogen and battery budgets). The energy sector may see increased investment opportunities for nuclear and hydrogen technology companies, though reduced subsidies could challenge hydrogen projects. Industrial firms leveraging CCS technologies may benefit from government support to offset emissions. 

The additional CO2 levy on top of EU requirements for industrial companies is cancelled, creating a more predictable regulatory environment. This change will reduce costs for heavy industry and manufacturing, but it may also lead to fewer incentives for innovation beyond compliance. Similarly, in transport and logistics, the postponement of net-zero emission zones offers temporary relief but delays the shift toward greener practices.

The nitrogen policy is up for revision, but specifics on implementation remain unclear. The focus is on safeguarding agricultural interests, with no forced reductions or expropriations of livestock farms, though voluntary buyouts will be offered. The possibility of an EU-level exemption is being investigated, which may protect sector interests but also creates uncertainty for farmers in agriculture and food production, complicating long-term planning without addressing the underlying issues.

Starting in 2028, a new plastic tax will be introduced, incentivizing waste reduction and circular economy principles and compelling consumer goods and packaging companies to reduce plastic use or invest in alternatives to avoid increased costs.

Additionally, the government is expanding its climate adaptation strategy to address challenges like flooding, heat stress, and water scarcity.

Social and Governance

The new government of the Netherlands has introduced a series of policy and strategic changes primarily focused on reducing the country’s environmental impact. When assessed through the ESG perspective, the environmental sustainability is at the forefront, but significant attention is also given to social and governance aspects. 

From a social perspective, the government is dedicated to enhancing the quality and accessibility of healthcare and education for all citizens. This includes initiatives to reduce waiting times in healthcare, increase the availability of medical professionals, and ensure that educational institutions are well-funded and equipped to provide high-quality education. By making these essential services more accessible, the cabinet aims to promote equality and improve the overall well-being of its citizens. For instance, the government allocates an additional €2 billion to the healthcare and education sectors to support these initiatives. When translating this into business implications, these changes could lead to a healthier, happier and skilled workforce resulting in increased productivity and reduced absenteeism.

The housing market might not be initially linked to business performance, but addressing the housing shortage is another critical focus to attract and retain staff. The new plans aim to build more affordable homes and improve living conditions. This involves increasing the supply of social housing, providing incentives for private developers to build affordable housing, and implementing policies to ensure that new developments are sustainable and energy efficient. These measures are designed to make housing more accessible and affordable, particularly for low- and middle-income families. The budget for housing development has been increased by €1.5 billion to accelerate these efforts. 

One of the pillars of the new government is strong accountability and restoring public trust in the government. By aiming to reducing bureaucratic red tape and making processes more straightforward, the goal is to make it easier for citizens and businesses to navigate regulatory requirements. This simplification is expected to enhance efficiency and improve overall transparency. The government has earmarked €500 million for initiatives aimed at regulatory simplification and efficiency improvements. In addition, Regular audits, public reporting of government activities, and the establishment of independent oversight bodies are some of the steps being taken to enhance accountability. By fostering a culture of transparency, the cabinet aims to build trust. For businesses, this can create clearer guidelines. It is to be seen how this aim will assist with the upcoming CSRD deadlines.

Forward thinking

The new plans set an ambitious tone, but proactivity remains crucial for companies. Significant uncertainty exists regarding the government’s ability to implement its strategy, as some ambitions do not align with current European legislation. Therefore, companies should not remain passive. It is essential to adapt strategies to include ESG metrics and ensure compliance with new regulations from the EU Green Deal, such as the CSRD, EU Taxonomy, CBAM, and the EU Deforestation Act.

Dutch companies may anticipate reduced government support when developing transition plans. Consequently, it is essential to create these plans promptly, involve the whole organization and avoid over-reliance on subsidies or other governmental assistance.

RSM is a thought leader in the field of Sustainability consulting. We offer frequent insights through training and sharing of thought leadership based on a detailed knowledge of industry developments and practical applications in working with our customers. If you want to know more, please contact one of our consultants.