Dutch corporate climate reports still fall short of upcoming EU requirements

Dutch companies are still a long way off from meeting the legal requirements for climate reports that will come into effect in 2024. Accounting and consultancy firm Ernst & Young (EY) published the conclusion as part of a study of the annual reporting, sustainability reports, and websites of 78 Dutch companies. The researchers did see some progress, but they hardly judged the average quality of the information provided.

"There is a critical backlog of companies active in sectors such as real estate, retail, materials and buildings, healthcare and consumer goods," warned EY partner Taco Bosman in a statement accompanying their Climate Barometer. "We are concerned that a large number of companies have not yet made sufficient progress to meet their obligations in a timely manner."

In 2024, stricter European Union rules will come into effect regarding how large companies must report their corporate social responsibility efforts. For example, they must more clearly demonstrate how they contribute to global climate goals. In addition, according to the EY researchers, companies should ask themselves "what risks and opportunities a 1.5-degree scenario will have on their business in the short term and what goals they should set to increase their climate resilience".

The “1.5-degree scenario” mentioned in the report is a reference to the agreements that countries have made in the Paris climate agreement. The aim is to limit global warming to 1.5 degrees Celsius. Above that, the effects of climate change, such as drought, heat waves, rising sea levels and more extreme weather, could be much greater. The IPCC panel of climate scientists has now called it "undeniable" that humans are responsible for accelerating climate change.

Compared to internationally agreed standards, Dutch sectors do not score well on average. They scored no better than 39 points out of the 100 needed for a perfect report.

The researchers also said that the business community is paying more attention to climate change. They also observed major differences within sectors. In the financial segment, for example, asset managers generally do not perform well, while banks and insurers are regarded as "frontrunners."

"While time is running out, it's not too late for the organizations we surveyed to provide greater transparency and higher quality," Bosman wrote in the report. He called attention to climate-related threats and opportunities "more essential than ever.”