Public companies can do much more for society if the government, as a shareholder, focuses less one-sidedly on finances and pays more attention to social returns. “Ultimately, government participation must serve the public interest. Currently, the contact between company and state is mainly focused on finances. This does a disservice to the living environment,” says chairman Jan Jacob van Dijk of the Council for the Living Environment and Infrastructure (Rli).
There are plenty of concrete cases, says Van Dijk in an explanation of the advice Participate without dogmas that was presented to Minister Tieman (Infrastructure and Water Management, BBB) on Thursday. Take the problems with gas drilling in Groningen. “There was far too little attention to the living environment. But if the shareholding government mainly emphasizes the importance of financial returns, you should not be surprised that this becomes leading.”
Infrastructure
The Netherlands has almost 550 government holdings, which are usually fully owned by the government, provinces or municipalities, or a combination thereof. Together they are worth around 88 billion euros, and according to cabinet advisor Rli, almost three-quarters of the public companies are in the “physical domain”, such as electricity (Tennet, Liander), infrastructure (Schiphol, Port of Rotterdam), regional waste processors or transport (NS, KLM). It is precisely these companies that can make a difference in the field of the living environment, where sustainability is concerned, for example.
The government’s financial focus is already evident from the [formele] shareholder instructions to the company, says Van Dijk, former Member of Parliament for the CDA (2002-2010). He cites Schiphol as an example (70 percent owned by the government, 20 percent by the municipality of Amsterdam). In addition to financial returns, the government focuses on the hub function [knooppunt] from Schiphol for the benefit of the Dutch economy. It is striking that the public shareholder does not mention health and safety, the Rli notes.
Far too little attention was paid to the living environment during the gas drilling in Groningen
Van Dijk: “If Schiphol had to pay more attention to the living environment, this would lead to a different policy. For example, in the pursuit of a hub function, a greater emphasis would be placed on international train connections such as to Frankfurt.” That would save a lot of short flights.
More attention to social returns would also have been welcome in the electricity world, according to Van Dijk. “For a long time, investments in infrastructure depended on whether they would be used intensively; otherwise, returns would decline. If these interests had been looked at in a different way, some of the current network congestion might have [onvoldoende capaciteit op het stroomnet] have been prevented.”
Zeitgeist
According to Van Dijk, the fact that the emphasis was on financial returns for decades was mainly due to the spirit of the times. After the RSV survey in the early 1980s – about futile state aid to the shipbuilder – ministers wanted to know in advance what the return on public money would be. “In addition, the idea arose in the 1990s that the market was more efficient if the government was not involved. Since the beginning of this century, we have seen that social sentiment requires more attention to be paid to other interests, such as a good living environment.”
In the current spirit of the times, it would therefore be logical for the government to take an interest in a company more often. But Van Dijk does not see that happening yet. “It seems that the instrument of government participation is at the bottom of the list. We now say: you can also achieve more goals with that instrument, just take it into account in your considerations.”
Also read
Tata Steel will receive state support of up to 2 billion to go green
As an example, the Rli chairman mentions steel producer Tata Steel, to which the government is considering granting a subsidy of 2 billion euros. In return, one of the agreements in a draft agreement is that the company will make part of its production more sustainable. “2 billion is a serious amount. Why was it not considered to take a stake in the company? Then you can also benefit from the returns in the long term. I’m not saying you should do it, but why haven’t you considered it?”
Van Dijk saw the same thing happen with the government’s investments in offshore wind energy. “As a government, we have invested 5 billion in offshore wind, and that money now goes to foreign companies. With a government participation, future returns would also have come our way. That consideration was not discussed and perhaps that is a missed opportunity.”
NEW: Give this item as a gift
As an NRC subscriber you can subscribe every month 10 articles give as a gift to someone without an NRC subscription. The recipient can read the article directly, without a paywall.