Environmental, Social and Corporate Governance (ESG)

For many companies, integrating sustainability and corporate social responsibility into their business operations presents a significant challenge. In order to accelerate this transformation, obligations and expectations are increasing, driven in part by national and international legislation and regulations. These rules and standards aim to strike a balance between financial performance, social impact and environmental protection. Against this background, it is essential for companies to pay close attention to ESG aspects, where ESG stands for:

• Environment

• Social

• Governance

In making this transition towards greater sustainability, thorough knowledge of both existing and forthcoming legislation and regulations is of crucial importance. Van der Feltz advocaten N.V. has the expertise to support your organisation in this process, with particular specialisation in ESG-related matters in the fields of environmental law, public procurement and litigation.

Environment

The environmental component (the “E” in ESG) concerns, in short, the activities a company undertakes to operate in an environmentally responsible manner and the extent to which it contributes to environmental pollution. In other words: how does a company contribute to, and perform in relation to, environmental challenges? This concept encompasses a broad range of activities, including energy consumption, greenhouse gas emissions, waste management, circularity and animal welfare. Below, two elements falling within the environmental aspect are briefly highlighted:

Environmental and planning law
Environmental considerations are closely connected to environmental and planning law. Since 1 January 2024, the physical living environment in the Netherlands has been governed by the Environment and Planning Act (Omgevingswet), which places sustainable development at its core. Subordinate legislation, such as the Buildings Decree for the Living Environment (Besluit bouwwerken leefomgeving), for example, imposes sustainability requirements on buildings, including obligations relating to energy-saving measures and energy labelling.

Energy transition
The transition from fossil fuels to sustainable energy sources gives rise to numerous legal issues. In relation to renewable energy projects, such as wind and solar parks, we advise on the required permits, subsidies, participation processes and spatial planning matters. Our expertise covers the entire energy law value chain: from exploration and production to transmission, distribution and supply.

Social and Governance

The social component (the “S” in ESG) relates to the relationship between a company and its stakeholders, such as communities affected by emissions or other business activities. These may include local residents living in the vicinity of a company’s operations or other stakeholders impacted by corporate decision-making.

The governance component (the “G” in ESG) concerns corporate governance. Directors are increasingly expected to take sustainability and corporate social responsibility into account in their decision-making and to reflect this in their Corporate Governance Code.

ESG and Public Procurement Law

Although ESG aspects are not yet standard elements in public procurement procedures, ESG-related issues are receiving increasing attention and are playing a growing role in procurement and tendering processes. Examples include the Manifesto on Socially Responsible Procurement (2016) and the Manifesto on Socially Responsible Commissioning and Procurement (2023), both of which aim to encourage the pursuit of societal objectives such as environmental improvement, the reduction of climate impact, and the promotion of diversity and inclusion.

For contracting authorities, it is therefore becoming increasingly relevant to assess not only price–quality ratios, but also the environmental impact of products and materials and the social responsibility of tenderers.

A recent example of the incorporation of ESG-related considerations in procurement is the approval by the Dutch Council of Ministers of a legislative proposal. This proposal provides, among other things, that for public works contracts in the fields of civil engineering, road and water infrastructure (GWW works) exceeding a specified minimum estimated contract value, environmental performance must be included as an award criterion where contracts are awarded on the basis of the most economically advantageous tender. In addition, ESG-related aspects may play a role in suitability requirements for tenderers and in minimum requirements relating to contract performance.

ESG and Litigation

As a result of the growing expectations and obligations placed on companies in relation to ESG matters, it is only natural that the number of disputes and legal proceedings in this area is also increasing.