Dutch companies have a good reputation for corporate responsibility. But is it fully deserved?
Stereotypes abound when it comes to the Netherlands. The Dutch are seen as progressive and tolerant. Their preference for canal boats and ancient bicycles over expensive vehicular status symbols demonstrates their egalitarian and practical outlook. They contribute generously to development aid and peacekeeping operations abroad, while at home they are big supporters of organisations such as Greenpeace and Amnesty International. Even if only half of the stereotype were true, the Netherlands should be a hotbed of corporate social responsibility.
The country has an impressive rollcall of multinationals for a country of its size. Major names that are at least part Dutch include Aegon, AkzoNobel, Heineken, ING, Philips Electronics, Royal Dutch Shell, TNT and Unilever. And indeed, these companies tend to rank prominently among the world’s best corporate responsibility performers.
They have a respectable presence in international indices of sustainability and ethical behaviour. There are 12 Dutch multinationals in the Dow Jones Sustainability Index (DJSI): more than Italy or Switzerland, and an impressive tally compared to the 19 listed firms from Germany, which has more than five times the Dutch population. In the Global 100 list of the world’s most sustainable companies, Dutch parcel firm TNT ranks in third place, while Philips is 17th.
But though Dutch companies are among the best, they are generally not the very best, or they are the best only in certain areas.
Research by MVO Nederland (Maatschappelijk Verantwoord Ondernemen, meaning CSR), a government-backed agency, indicates that Dutch firms understand very well how corporate responsibility can add value to business operations and lead to greater financial returns, and that Dutch multinationals are among the most aware when it comes to supply chain risks. But in other areas, the Dutch could do better.
Reporting leader
For example, according to MVO Nederland, 63% of major Dutch companies produce a sustainability report, ranking the Netherlands fifth out of 22 countries for this. However, only 26% of Dutch reports are independently verified, compared with an average of 40%.
MVO Nederland also says Dutch companies are less likely than average to have energy-use reduction plans, and do less business in clean energy technology, organic produce or fair trade products than most neighbouring countries. Dutch companies do, however, outperform their German, Italian and Spanish counterparts. “Representation in international rankings is promising,” MVO Nederland says. But Dutch firms could “implement improvements”.
This all leads to the suspicion that Dutch companies are good box-tickers, but lack the innovative touch for responsible business.
Andre Nijhof is a professor and corporate responsibility specialist at Nyenrode Business University – which was established in the 1940s by leading Dutch companies. He says that companies such as AkzoNobel, DSM and Shell, all active in chemicals and petrochemicals, “are really doing a good job [in corporate responsibility] compared to their competitors”. But “in absolute terms they still have a long way to go”.
Shell was removed this year from the DJSI, having been a fixture since the index’s foundation in 1999. No official reason has been given for the delisting, though Shell’s activities in the Niger delta have attracted sustained criticism. But it may be that Shell dropped out simply because it stood still in sustainability terms and allowed other firms to overtake it.
An examination of the profile of companies such as Shell tends to lend weight to the good-but-could-do-better view. The top Dutch firms are a century or more old, rather than dynamic newcomers with original business models.
Aegon, Heineken, Philips, Shell and Unilever all have their roots in the second half of the 1800s. They have international outlooks, as a consequence of their small home market, which is why they rate well on supply chain issues, says Huib Klamer of the Confederation of Netherlands Industry and Employers. “We have to do business with respect for different cultures. We are used to adjusting ourselves,” he adds.
But in other respects Dutch multinationals tend to be responsible business followers rather than trailblazers. They conform well to standards set by the Organisation for Economic Cooperation and Development, the International Labour Organisation and other bodies.
However, Andre Nijhof says the “real leaders” in the Netherlands are smaller, younger companies that have built ethical concerns into their businesses from the outset.
Internationally, Dutch companies are often surpassed in corporate responsibility terms by their American, British or Scandinavian counterparts. It may be a land of tulips and tolerance but, as Huib Klamer says, “we are not as beautiful as you think”.
Additional research by Boris Peters
References:
Socio-economic statistics obtained from recent publications from the CIA Factbook and the Human Development Index.
Corporate responsibility data obtained from an October 2010 Ethical Corporation survey.
Guideline and standards statistics obtained during October 2010 from the official website of each initiative.