Environmental, Social and Governance (ESG) in the supply chain

Climate change, biodiversity loss, and resource depletion are fundamental topics that need to be addressed by our society in all its facets in order to achieve a more sustainable, ethical and social supply chain. Sustainability is more than just reducing the use of fossil fuels and planting trees. Experts advocate for, among other things, the reorganization of landscapes, agriculture, and the adaptation of construction practices. Moreover, if the design, production, transport, use, and disposal of products is circular it will preserve valuable resources. Ethical and social aspects relate to labor conditions, diversity & inclusion, equal pay, anti-slave labor and anti-corruption. ESG is also more than just meeting legal compliance, depending on the company goals and specific sector or industry.

These are major changes, each of which is not inherently legal in nature, but where the legal framework is certainly of great importance. The courts have already demonstrated through the Urgenda and Shell judgements that sustainability across the supply chain can be legally enforceable. Moreover, as a result of the European Green Deal—the agreement among EU member states to become climate-neutral by 2050—an enormous amount of legislation is being developed and has recently come into effect. The legislative initiatives to achieve the Green Deal's goals are extensive and impact various sectors and topics. These include - amongst others - ESG reporting obligations, supply chain due diligence, rules to combat greenwashing, transparency and information requirements, eco-design requirements for different product groups, and regulations on waste and packaging. Supervisory bodies like the Dutch ACM and AFM have sustainability policies that they will apply when assessing compliance with existing and new legal frameworks.

Our clients, each with their own ambitions, are working on the transition to more sustainable and socially and ethically responsible business practices. We assist by monitoring legal developments and shaping them where possible, based on our own vision to act responsibly and with integrity in order to make a significant contribution to the sustainability of our (global) society. Would you like more legal support regarding this topic? Then don't hesitate to contact our experts: Martine de Koning and Renske Sinke.