Environmental, Social and Governance Criteria in the Netherlands: Interaction Between Government and the Courts

Abstract

The author discusses the role of private law in achieving goals related to ESG (environmental, social and governance) criteria in the Netherlands, particularly in the context of climate change and energy transition. Private law can be used as a last resort when government and administrative law fail, influencing the policies of governments and companies. However, the author argues that recent developments challenge the trias politica, which is a cornerstone of the state's rule of law. Despite clear standards provided by international and EU law, companies and governments neglect court decisions, and appeal procedures delay action. Nonetheless, private law is starting to play a role, where banks refuse companies’ loans if their legal paperwork is not up to pace with the law, new forms of contracts regulating labor relations are bound to mandatory private law, and accountants put environmental hazards as legal hazards in annual reports, necessitating clients to contribute to environmental and climate improving measures. The author argues that innovative climate policy from the government is the most important route to change.