Even though the Corporate Sustainability Reporting Directive (CSRD) generally does not apply to public organizations, many of them are engaged in sustainability reporting. Deloitte conducts annual research on the current state of affairs. Here is a conversation about ambitions and challenges with Harriette Laurijsen, Strategic Sustainability Advisor at Radboudumc, Roelien Ritsema van Eck, member of the Board of Directors at housing corporation de Alliantie, and Melle Schol and Joey Hodde, Change Manager and Senior Sustainability Strategist respectively at the municipality of Amsterdam.
Juwi Liu, Director of Assurance at Deloitte, works as an advisor in the public sector focusing on ESG accounting and reporting. She deals with issues related to CSRD and sustainability control: "I am eager to use my knowledge and experience to improve sustainability reports, thereby enhancing understanding and contributing to the sustainability transition."
Bart Blomjous, Director of Audit at Deloitte, is the lead auditor for municipalities and healthcare institutions. In addition, he spends part of his time, alongside Juwi, on improving and expanding sustainability accountability by public institutions.
In 2024, Deloitte conducted the ESG Quickscan survey for the second time in the public sector using public data. This involved reviewing annual reports and sustainability reports from the hundred largest public organizations, ranging from education to healthcare, and from housing corporations to municipalities and provinces. The research highlights the opportunities to further translate ambitions into measurable strategies and KPIs. There are particularly opportunities in the areas of social and governance aspects to enhance reporting and accountability. Additionally, the value chain offers ample room for further insights that can contribute to increasing sustainability impact.
The research underscores the potential for further growth and improvement. The public sector can further strengthen its role in sustainability, with sustainability accountability being a powerful tool to accelerate this transition. We discussed this with four frontrunners.
Laurijsen: "We have been reporting on sustainability for years because we find it important. On one hand, it helps us understand how we are doing and how we are performing against our goals. On the other hand, we want to be accountable to the public. We aim to be transparent about our impact on the environment and the social domain. We see it as our social duty."
Schol: "The Amsterdam City Council passed a motion expressing the desire to manage CO2 emissions in the same way financial resources are managed. Therefore, our objectives are defined not only in financial terms but also in terms of sustainability."
Hodde: "As a public organization, we do see a mismatch with the CSRD. We view that directive as more of a tool specifically designed to regulate commercial companies, while a municipality's raison d'être is to serve its residents. Nonetheless, we now use the budget to guide all sustainability initiatives, bringing together many different monitors. Where we used to provide separate data from various sectors, like the port or industry, it now forms an integrated foundation for policy."
Ritsema van Eck: "Sometimes I think we could have avoided legislation by acting earlier together. But in practice, rules often ensure that people and organizations take action. By the way, we, with Alliantie Ontwikkeling, have the only corporation with a business that must comply with CSRD legislation. But even without that obligation, we would have definitely addressed this theme."
"How do we link action perspectives to the set goals?"
Joey Hodde, Senior Sustainability Strategist at the municipality of Amsterdam
Ritsema van Eck: "Two things. You need a lot of data, and you must carefully manage it across the entire chain. The data within our own organization is already very complex, let alone all the information we need to share with our suppliers, contractors, and other chain partners."
Hodde: "Our central challenge is: how do you link action perspectives to the set goals? Especially considering that a city like Amsterdam deals with a huge diversity of core tasks, from welfare benefits to mobility plans and waste management. These tasks are spread across 52 departments. Add to that roughly 170 sustainability goals and ten budget programs, so there are quite a few levers to pull."
Laurijsen: "Another major challenge is: how do you find the right KPIs for the objectives you have? If you aim to achieve a maximum of 25% residual waste by 2030, you risk flattening the goal—and losing sight of the original intent. Additionally, is a quantitative report rich enough to portray the qualitative picture? The question is also: how can we report very concretely while still doing justice to the overall picture?"
Laurijsen: "We mainly collaborate with other UMCs within the NFU as well as with other partners of the Green Deal Sustainable Healthcare, such as NVZ and ZN. Together, we look at how we can achieve the objectives as effectively and efficiently as possible, including through knowledge sharing. We collaborate in creating a framework for reporting. For example, we use each other's experiences in conducting stakeholder analyses and double materiality analyses. If you want to report according to the CSRD, there's a lot involved. To make it manageable, you need to make sharp choices about what you will and won’t report on. Three strategic material themes emerged from our materiality analysis: health, vital employees, and CO2 emissions. However, since we are not obligated to comply with the CSRD, we take the liberty to also report on other urgent themes like circularity and biodiversity, in a way that does not fully meet the CSRD requirements."
Hodde: "When it comes to measuring results, there is a difference between the corporate world and the government. A government typically deals with many more things than the average company. And what could be considered results for us goes even further than the domains covered by the CSRD. Allocation of resources, for instance, receives much more attention than fine-tuning measurables. From that perspective, I see the budget primarily as a tool to strengthen ownership of certain themes. And once everyone feels ownership, the next step is accountability. On a meta level, you could say: you want everyone to do sustainable things, but more importantly, that everyone does their things sustainably."
Schol: "Additionally, we continuously make decisions based on the societal mandates we have as a municipality. Do you build three sustainable school buildings? Or, for the same money, do you build five that aren't sustainable?"
"The financial and societal administration should be evaluated equally—and treated with equivalent effort."
Harriette Laurijsen, Strategic Sustainability Advisor at Radboudumc
Ritsema van Eck: "Administration needs to be done more intelligently. Hopefully, we will learn a lot from each other in this regard. Currently, everyone is calling each other for interviews. What do you, as a stakeholder, find important about the other? We also notice significant differences in the knowledge, experience, and expectations of parties. Everyone is looking for guidance. How high should the bar be set? What do you expect from each other? Banks are asking about it, and so are contractors. I am confident that, over time, the entire chain will increasingly guide each other better and that we will develop a common standard together."
Hodde: "For smaller municipalities, it's very different than for Amsterdam. They often have to do the work of three people where we might have a hundred and fifty working on it. Our circularity monitors, which model all incoming and outgoing material flows? That methodology isn't feasible for every organization, but the climate monitor already offers a much more attainable toolkit. So, it will be challenging to come to a standard approach that works for organizations of all sizes, although I can imagine there must be common elements. Municipalities can certainly help each other, for example, with CO2 reporting. So if you don't have too much manpower, minimize your administrative burdens by focusing on the themes where you can make the greatest impact."
Laurijsen: "We should also start looking differently at the distribution of administrative burdens. When I see how much manpower is available in healthcare for financial reporting compared to sustainability reporting, I think it could be distributed more fairly. In my opinion, both should be valued equally, and the administration should be handled with equivalent effort."
Laurijsen: "Sustainability has been part of our strategy for thirteen years and is now even one of our strategic focal points. Our aim is: ‘Everything we do, we do sustainably.’ Our ambition echoed in the title of our first sustainability policy, ‘sustainability in the genes.’ We want all 12,000 people who work or study with us to integrate sustainable thinking into their actions. For this reason, we chose to organize sustainability ‘in the line.’ There is no ‘sustainability department’ responsible for achieving sustainability goals. Ideally, sustainability is considered in all decision-making—just as there is attention to finances and patient safety in decisions. At the strategic-tactical level, we manage with central programs, and at the operational level, we facilitate the bottom-up flow through, among other things, Green Teams in departments."
Ritsema van Eck: "With us, the responsibility lies with financial reporting, which also prepares the annual accounts, because sustainability reporting will become a large component of the annual report. We have responsible persons per theme, so for example, the HR manager, the circularity expert, and the asset manager also make significant contributions. The organization is broadly involved, as it ultimately affects everyone."
Laurijsen: "In addition to substantive sustainable goals, we are focusing on better reporting, partly by obtaining more and better data. Insights from this data help in making policy decisions. For instance, much data is still missing regarding our indirect CO2 emissions (scope 3) in the supply chain: I would be thrilled if in five years we have a clear picture of our indirect emissions, just like our direct emissions, and that we see a significant decline in these figures. It is also encouraging if data becomes available at the departmental level instead of organization-wide. Then departments can directly manage their own results.
If I had to summarize: in five years, there will be a comprehensive report on corporate social responsibility. With equal attention to financial and social aspects."
Schol: "We also want to better manage sustainability goals, just as we do with financial targets. The quality of sustainability data must be high, and the question becomes: how do you connect that with financial data? How do you formulate the sustainable business case? Can you make CO2 as strong a unit of calculation as money? And can you adapt the financial world's systems for the social and environmental domains? However, I don't believe we should wait until the sustainable data is as concrete as the financial data. Executives will need to allow space for non-financial considerations. This requires new vocabulary to effectively and convincingly convey the importance of those non-financial matters."
"We would ideally like a platform where all information can be shared with each other."
Roelien Ritsema van Eck, member of the Board of Directors at housing corporation de Alliantie
Hodde: "As a municipality, you have much less influence over some partners than others. With some partners, you have purely a client relationship, while in others, we are even shareholders. To keep things transparent, we differentiate between effect indicators and transition indicators. For example, if you set certain goals with a large waste and energy company now, the results will only be visible in the effect indicators several years later. However, the transition indicators already show that something is happening."
Ritsema van Eck: "Different chain partners currently request data in their own ways. Financial parties also use different formats for this. This still leads to a lot of additional administrative burdens for now. Ideally, we would like a platform where all your information can be shared with each other."
Hodde: "You don't need to know everything perfectly before you start taking action. If you already know that the biggest impact is in the built environment and mobility, you don't need to spend years calculating decimal points to start making strides in those areas."
Schol: "Sustainability data will not be as robust as financial data for several more years. Don't let that hold you back. Feel free to challenge your interlocutors on their personal decision-making system: 'What kind of city do you want to be?'"
Ritsema van Eck: "And don't waste time complaining. View new developments as opportunities, focus your energy on the positive aspects, and initiate actions to improve the entire value chain."
Laurijsen: "Last but not least, seek collaboration with partners and gradually work together step by step."
For those looking to take their first steps in sustainability reporting, as well as for those who are already advanced: the report of our research—with insights and recommendations per sector—is available for download.
In addition, there is the 'Guide to Sustainability Reporting and Accountability for Local Governments.' This guide, with guidelines and practical tips for measuring, reporting, and improving, was developed by the 'Coalition of the Willing,' of which Deloitte is a part.