If you ask large companies, you will often be told that they are already doing a lot on sustainability – it is a top priority. But in reality, the sustainability goals of many Dutch listed companies are not ambitious enough to keep the planet livable.
This emerges from a survey of 35 Dutch listed companies that will be published this Tuesday. It was carried out by the University of Maastricht, on behalf of Eumedion, the representative of institutional investors.
Of the goals that these companies set are those for CO2reduction is the most concrete and far-reaching. Of the 35 companies, 24 have set themselves the CO . target at some point2-become neutral. Targets for circularity and biodiversity are rarer. While many companies consider waste to be a major problem, only five have plans to become fully circular. Only nine say anything about biodiversity.
Companies see opportunities in sustainability. Who ‘best in class’ is, attracts more customers
The researchers based their findings on 88 interviews with directors, supervisory directors and sustainability managers, and the annual reports. They’ve been working on it for a year, says Rob Bauer, professor of finance and member of the research team. The participants include well-known AEX companies, including Heineken, Philips, Ahold Delhaize, Unilever, DSM and ABN Amro, as well as smaller companies. Companies with the image of CO2-big emitters such as Shell and KLM did not participate. One possible shortcoming, the researchers acknowledge, is that their selection — they looked only at companies that volunteered — could paint an unbalanced picture. However, they also point out that the sustainability performance of the companies that participated did not stand out in particular.
More chance of customers
The researchers try to answer the questions why companies embed sustainability in their business operations, and how they do it.
To start with the first: apart from the obvious reasons to become more sustainable – regulation, pressure from investors and customers – another driver stands out. The interviewees appear to see more opportunities than risks when it comes to sustainability. Thus there is the chance tobest in class”, as a supervisory director of an industrial company puts it, and thus acquire additional new customers. “It sometimes surprises me that people only look at the negative sides,” says a board chairman. There are competitive advantages to be gained by going further than the rest. “If you’re smart, you can take advantage,” says the sustainability manager of a real estate company. A remarkable vision, says Professor Bauer. “Because for the world as a whole, it’s mainly about risks.”
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This optimism within the business community is also reflected in their view of their own progress. Interviewees, the researchers write, had “significantly more to say about their company’s performance in embedding sustainability than about its shortcomings.” The shorter their company has been actively involved in sustainability, the less the interviewees paid attention to their own weaknesses.
A goal, not a year
Then the question: how do these 35 companies make sustainability part of their business operations?
Sustainability is often part of the strategy: in two-thirds of the companies, the researchers judged that strategic goals related to sustainability are an important ‘pillar’.
Many companies also set targets, but the way in which they are done differs considerably. The majority, for example, mention concrete years for all goals, but fifteen companies do not do that for every goal – then it becomes very non-committal. In addition, some companies make it a puzzle by spreading the goals over different places in the annual report or sustainability report.
Within companies, the board of directors is seen as the main person responsible for sustainability. Within this, the top man or woman is the ‘main driver’. In that light, it is remarkable that the supervisory directors, who supervise the chief executive, are often not required to have specific knowledge in the field of sustainability, for example in a profile. Something you might expect, given the importance of the subject, says Professor Bauer. “They must be able to oversee the sustainability strategy. And they are decisive in the selection and evaluation of the CEO.”
A version of this article also appeared in NRC in the morning of October 26, 2021
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source https://pledgetimes.com/become-circular-dutch-stock-exchange-companies-are-not-working-on-that-yet/
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