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Albert Heijn and Swisslog to launch automated home shop center in 2023

23 Nov 2022
Current news

Albert Heijn will open their first automated distribution center for e-commerce that will not only be sustainable, but it will also fill 45,000 online customer orders per week in its new 25000 m2 Barendrecht facility. This innovative facility will, according to Albert Heijn and Swisslog, also come with a BREEAM certificate just like all the other Albert Heijn facilities. This certificate is granted on the basis that the building is fitted with solar panels, an energy-efficient cold store, LED lighting, a heat pump and is completely gas-free. Swisslog, the global provider of warehouse automation and software, is behind the genius implementation. Albert Heijn speaks of ‘an integrated solution from Swisslog, including an AutoStore: a system that uses robots and bins to quickly collect loose products, such as a jar of peanut butter or a tube of toothpaste’.

The order picking of loose products will no longer be fulfilled by employees of Albert Heijn, instead, these will be picked by roughly 300 robots in the so called Autostore. Head of Sales at Swisslog Benelux says that this unique solution which will use smart SynQ software to fill, transport and sort a shopping crate.

Albert Heijn works exclusively with the Lean Startup principle. This method is a very efficient method to innovate and develop concepts, with the emphasis on the rapid validation of ideas and continuous customer contact. One example is the Albert Heijn Robot Delivery which raced through the High Tech Campus in Eindhoven, to deliver the online orders to its customers from the Albert Heijn To Go store. This experimental project demonstrated the methodology behind lean startups.

The supermarket giant is addressing the nationwide staff shortage by making use of the robots. Not only will this be a lighter workload for their order picking employees, but also cost efficient, as robots can pick up to 1200 items per hour whereas its human counterpart, only up to 400. Modern robots also become less costly as the drive for this technology increases. The cost of employing a human will only rise. The goal ultimately is that the work would be carries out more sustainably and more efficiently.

Albert Heijn is not the only retailer who are making use of robotics. Online supermarket Picnic opened a new distribution center in Utrecht where groceries for up to 150,000 customers can be collected by robots. Staples such as hagelslag, butter and dairy are brought to the order picker on a conveyor belt which means the employees barely have to walk anymore.

Will the use of robots lead to lower delivery costs for consumers? Yes, potentially, but the actual effects of the lower costs for the retailer will take a few years to realize. It is also costly to train employees to use new technologies and ultimately the age-old game of supply and demand will dictate what price a supermarket will charge. Price alone, is not the only item which supermarkets compete on. Catering industries, bakeries, meal kit providers are also hot items in this space.

Sources:

Albert Heijn and Swisslog realize automated Home Shop Center (ah.nl)

https://retailtrends.nl/news/68206/albert-heijn-bouwt-aan-geautomatiseerd-dc

https://www.foodpersonality.nl/albert-heijn-volgend-jaar-geautomatiseerd-e-commerce-dc/

https://www.ah.nl/over-ah/innovatie/labs

AH uses 300 robots for home delivery: ‘Good for margins’ | RTL News (rtlnieuws.nl)

https://www.rtlnieuws.nl/economie/bedrijven/artikel/5303217/picnic-warehouse-online-supermarkt-lopende-banden-order-pickers

Photo by Alex Knight: https://www.pexels.com/photo/high-angle-photo-of-robot-2599244/

Digitalising the European Union’s (EU) Green Taxonomy

15 Nov 2022
Actual, Current news, Europe

The EU Platform on Sustainable Finance’s reporting on data and usability of the EU taxonomy (October 2022) is based on maintaining the drive for sustainability in companies. To assess and encourage the EU’s sustainability goals, and to define what is meant by sustainable activities, the EU has created a “green” taxonomy. Since Europe is gradually requiring enterprises to provide an assessment of their capital expenditure and business activities as aligned with this taxonomy,  it is significant to comprehend the green taxonomy and to understand if your company is obliged to report.

 

Framework

The framework of the EU green taxonomy reporting is aimed to contribute to the EU’s environmental objectives and to not do “ significant harm to any of the environmental objects”. In general, this means that for meeting the EU’s climate and energy targets for 2030 and to reach the objectives of the European green deal, it is necessary to direct investments towards sustainable projects and activities. Therefore, the EU taxonomy could provide “investors with security, protect private investors from greenwashing, help companies to become more climate-friendly, mitigate market fragmentation and help shift investments where they are most needed”.  Furthermore, “the EU taxonomy does not only specify disclosures but also mandates the usage of the resultant data”.

For a company to be on par with the taxonomy, the business activity should be carried out in compliance with “any minimum safeguards” (e.g. UN Guiding Principles on Business and Human Rights), and with industry standards which can be classified as a set of technical screening criteria.

The green taxonomy is not an XBRL taxonomy, but rather a classification system for sustainability reporting. Herein, various (economic) activities are categorised by their impact on the EU environmental objectives. To assist the EU in measuring, and therefore meeting, these goals, the companies should disclose the following information as indicated in the taxonomy: operational expenditure, turnover, and capital expenditure. Article 8 disclosure is utilized as legislation specifying the disclosure rules for both financial and non-financial companies. For an overarching overview of reporting obligations, see figure 1.

 

Figure 1: Platform on Sustainable Finance’s recommendations on data and usability of the EU taxonomy, p. 26

 

Advantages

Not only EU’s sustainability goals can be assessed with the information from the green taxonomy, but the data can help inform investors since the legislation requires financial companies to use the data as reported by non-financial companies in assessing the sustainability of said enterprise’s investments. Moreover, the data can be of interest to the European Supervisory Authorities which include European Securities and Markets Authority (ESMA), European Banking Authority (EBA), and European Insurance and Occupational Pensions Authority (EIOPA). According to CoreFiling, the resulting is optimal to share broadly and efficiently and to create “digital, machine-readable and standardise reporting”.

Noticeable is that, whilst the legislation is showing the reported data, a digital data standard is still lacking. Concerns are that, potentially, the burden of the legislation on companies gets increased and that third parties or national variations can fill this gap. The expectation is that the EU will require disclosures in Inline XBRL (iXBRL), which is an extension of the European Single Electronic Format (ESEF).

 

Concept of Proof

In a concept of proof by the collaboration between CoreFilign and Greenomy, an XBRL standard is created for the company and regulatory reporting. In this IXBRL document, the proof of concept was successful and article 8 in the EU taxonomy legislation could be produced, applied, and tagged. The report and the interactive version of the green taxonomy can be found here.

 

Conclusion

To conclude, “legislators can reduce the burden of data-focussed legislation by mandating digital, machine-readable and standardised data definitions and reporting formats”, as seen in the IXBRL concept of proof. By creating a human and computer-readable document, the sustainable activity taxonomy can be effortlessly shared, digitalised, and standardised. This would assist in reducing the efforts of the company, and give no rise to a gap in the reporting procedure. In general, the EU green taxonomy benefits not only the outlook on the EU ‘s sustainability goals but also on “any jurisdiction where a flow of data among market participants is required to meet sustainability goals”. Concerning companies, having a positive outcome on the EU green taxonomy can rake in investments to further emphasise and meet the sustainability goals.

 

The document of Platform on Sustainability Finance’s recommendations on data and usability of the EU taxonomy can be found here.

 

 

Sources

https://www.xbrl.org/news/digitising-the-eus-green-taxonomy-a-proof-of-concept/

https://www.corefiling.com/2022/10/20/digitising-the-eu-taxonomy/

https://finance.ec.europa.eu/sustainable-finance/tools-and-standards/eu-taxonomy-sustainable-activities_en

https://finance.ec.europa.eu/system/files/2022-10/221011-sustainable-finance-platform-finance-report-usability_en_1.pdf

https://www.nordea.com/en/news/the-final-eu-taxonomy-and-next-steps-in-sustainable-finance-0

https://www.marketscreener.com/quote/stock/NORDEA-BANK-ABP-46475558/news/EU-Taxonomy-reporting-A-first-look-at-the-challenges-and-best-practices-42262260/

The future of traditional banking – The rise of neobanks and digital banking

08 Nov 2022
Current news

What are Neobanks or online banks?

Digital banks are a type of financial institution that offers banking services designed to be managed exclusively from a smartphone or web application, without traditional physical branch networks. Neobanks are also referred to as internet-only banks, virtual banks, online banks or digital banks and these bank accounts aren’t only convenient, but often cheaper with fewer fees than traditional banks. Neobanks offer lucrative features such as multiple sub-accounts, budgeting tools, savings functions, push notifications and other in-app functionalities.

Traditional banks have faced little competition over the years and consumer passivity and the extensive costs for traditional banks to move away from existing working systems are the main reason why traditional banks remained at the forefront of the banking industry. However, the recent move towards a digitized world has forced banks to re-evaluate their approach to become compatible with a digital world. These basic adjustments have not yet ensured significant changes to traditional ways of banking, as traditional banks are layering modern front-end technology onto existing legacy systems to bring traditional products through new digital channels.

The disparity between the age-old legacy systems used by traditional banks and the new digital systems used by virtual banks is stark. Examples of legacy systems include hardware in power plants, manufacturing machines controlled by computers running MS-DOS, or outdated financial systems. In reality, however, legacy applications still power important business processes in many other sectors around the world. Most traditional banking legacy systems have been running for over three decades with countless amounts of money moving through their systems daily. With so much money relying on these systems to operate smoothly, one can understand why the risk and complexity to change them outweighs the need for digital revolution. Any change runs the risk of introducing errors and therefore banks have taken a risk averse approach.

Legacy systems come with two major hurdles: maintainability and flexibility. Firstly, the cost of maintaining traditional legacy systems become steeper, the longer it goes without being updated. This is because the systems were developed with technologies that are no longer well supported and do not have large pools of talent that can address them. These rising costs in turn starves new investment into more modern systems. Secondly, due to the difficulty to change these outdated systems, the more inflexible they become alongside industry and technology advances. Modern technology companies thrive on the ability to deliver lots of small changes quickly. The bottom line is that investing in new technologies is not feasible because they are simply too difficult to integrate or are incompatible with legacy systems and existing architecture.

The advantages of digital banking far outweigh what traditional banks offer. Signing up is almost instant. You can usually open an app-based account within minutes provided you have an internet connection. In the Netherlands you will need to provide proof of residency and proof of identity by way of either a passport or driver’s license. Your entire bank account is built to live on your smartphone. You therefore have access to most features where, and whenever to want. You can request money, send money, draw up budget and set money aside for saving all from the comfort of your phone. A big advantage of digital banks is they often have no fees for foreign currency transactions. This is a lucrative and unique selling point for travelers and expats alike. This benefits consumers when shopping online from an overseas site, or simply sending money across the border. Other features allow for holding multiple currencies in one account. This means that when the customer moves to another country, they skip the hassle of closing a traditional bank account as they can access this digital account from anywhere around the globe.

Help is available 24/7 and there is no need to visit a traditional bank branch to get support. With various ways to connect with the digital bank as well as their online community, most questions can be resolved instantly. Your digital bank will instantly notify you about your spending such as the time, place, location and amount of your and of course your balance. These spending insights can instantly be used to draw up a budget based on historical purchases or to categorize spending and saving habits. These useful budget tracking tools are designed to help the consumer take direct control of their money. What more could one ask for from a bank that automatically divides your spending into categories, ensures you have enough money to pay bills and helps you save towards your goals?

There are disadvantages to having an online bank. Many neobanks don’t offer credit facilities, cheques, mortgages or business accounts. This might result in higher interest rates on certain products due to the fact that not all of one’s financial products are bundles to the same account. Other restrictions may include a limit to free ATM withdrawals per month.

When choosing an online bank, it is important to note that your money might not have the same protection as it would with a traditional bank. In the Netherlands it is advisable to check if the bank has been granted a European banking license. This information should be published on the bank’s website or requested from bank directly. It is always a good idea to understand how your money will be protected.

Neobanks aren’t controlled by traditional banking technology and costly networks of physical branches, this is another reason their fees are mostly lower and sometimes come with free features. The entire banking service is conducted completely online via desktop or mobile app. Neobanks are categorized into two types of digital banks: a full stack neobank or a front-end focused neobank. A full stack neobank operates as an independent bank with its own banking license that operates completely independently. Comparatively, a front-end focused neobank does not have its own banking license and thus operates in partnership with a traditional bank to provide its services to customers.

Sources:

https://www.insiderintelligence.com/insights/neobanks-explained-list/

https://www.finder.com/nl/en/digital-banks

https://internationalfinance.com/legacy-systems-in-banks-explained/

Photo

Photo by Ivan Samkov: https://www.pexels.com/photo/person-paying-using-her-smartwatch-7621142/

1 Jan 2023 marks mandatory helmet for blue license plate scooters in the Netherlands

30 Oct 2022
Actual, Netherlands

After an emergency letter by a big group of doctors (130) to the government and an opinion article in NRC, 1 January 2023 marks the introduction of mandatory helmets for blue license plate scooters/mopeds in the Netherlands (25km/h). Whereas neighbouring countries have already regulated this type of vehicle in the previous years, four years after the initiated change the government implements a fine of 100 euros in the case of not wearing a helmet. However, specialists argue that allowing a speedpedelac helmet, as an alternative to the usual scooter helmet, makes it even more dangerous.

 

Introduction

The blue license plate scooter (snorfiets) in the Netherlands is a scooter limited to 25km/h. This type of transport is popular in the Netherlands due to the fast and flexible method of transportation, especially in the cities. To drive this type of moped/ scooter, you must be 16 years old and have a special moped driving licence (AM). Upon successfully getting the car driving license (B), one can drive a moped since this is enabled through the B license. A WA-insurance is required and starting from January next year, a 100 euro fine is given to drivers not wearing a helmet.

 

Idea                    

After the idea got approved by the government back in 2018 to tackle (permanent) brain injuries as a result of collisions, next year marks the implementation. Scooters can easily be upgraded to 30-32km/h, and even 80km/h is not a rarity. This results in dangerous activities and often permanent (brain) damage in the case of an accident. While the experts were satisfied at first, this new regulation took 4 years to launch, and the minister of infrastructure and water management changed the initial plan to also allow speedpedelec helmets for the moped.

According to neurosurgeon Wilco Peul, allowing the speedpedelec helmet results in a fake sense of security and a difficult time doing law enforcement. The prospect is that the number of people with serious brain injuries will insufficiently decrease. An urgent message to the minister is sent to re-adjust the allowance of speedpedelec helmets for blue license plate scooters.

Internist Wouter Bierman argues in RTL that the largest group of scooter enthusiasts, the youth, does not know the repercussions of having an accident. In the case of an accident, the driver will often have a lifetime of damage. In retrospect, Bierman juxtaposes this to tv-programs or movies where drivers easily and quickly wake up from a coma as a result of the accident. In reality, some do not wake up, some awaken slowly, while a large number cannot live their life as planned due to a serious brain injury.

 

Helmet

But what is wrong with the speedpedelec helmet? The speedpedelec, an e-bike with a maximum speed of 45km/h due to the pedal assistance, goes faster than the scooter. This should be safe right? Well, these types of helmets are thinner and lighter than motor or scooter helmets. The speedpedelac helmet leaves the ears uncovered, and can imply even more damage to the driver. The tests and conclusions by the government are based on results whereby the scooter has a maximum speed of 25km/h. However, the increase in speed, often common in scooters, gives even more disadvantages upon using the speedpedelec helmet.

Another discussion point is law enforcement. Experts argue that the scooter driver might use a bike helmet instead of the speedpedelac helmet since they look identical. Only the number on the inside of the helmet tells the police the type of helmet. This means that enforcement of to use of the correct helmet is almost impossible. In the case of an e-bike with pedal assistance, you still need to “pedal fairly hard” and the hole in the helmet assists in redirecting the heat. This model of helmet weighs the ventilation and security aspects.

Therefore, when used on a blue-license plate scooter, where ventilation holes are not necessary, one should wear a helmet for the best protection. In other European countries, governments do not make this distinction between scooters and the Dutch 25km/h scooters/ mopeds. According to Bierman is it unbelievable that, while the gravity is equal in all the countries, that different regulations are in place.

 

Previous regulations

In Amsterdam and Utrecht, the local policies differ and mandatory helmets and driving on the main road are required. For the new helm obligation, all other rules stay the same. This means that driving on the bike lane is still correct. In these municipalities, users of 25km/h scooters swiftly shifted to alternatives such as the popular e-bike. While driving becomes less dangerous, the haircut will not be the same as while wearing a helmet.

 

Exchange

Nowadays, this trend is recognizable and people use Facebook and Marktplaats to get rid of their snorfiets. The sales of this type of scooter are around 30.000 in the first three quarters of the year. This enormous decrease in the months from January until September is the first in 15 years. The city of Tilburg (municipality Brabant) plays in on this shift and offers 300 euros to scrap your scooter. Another 300 euros is given if an (electric) bike is bought. This subsidy is directed at making the air cleaner and decreasing the number of accidents.

 

Sources

https://www.rijksoverheid.nl/actueel/nieuws/2022/06/30/voorstel-nieuwsbericht-helmplicht

https://www.nu.nl/economie/6229751/snorfiets-legt-het-af-tegen-brommer-nu-een-helm-per-2023-sowieso-verplicht-is.html#nujij

https://www.stella.nl/over-stella/nieuws/helmplicht-jongeren-ruilen-massaal-scooter-in-voor-een-e-bike

https://www.rtlnieuws.nl/nieuws/nederland/artikel/5324805/helmplicht-snorfietsen-artsen-boos-speedpedelec-helm

https://www.rtlnieuws.nl/nieuws/politiek/artikel/4514326/meerderheid-tweede-kamer-wil-dat-helm-verplicht-wordt-op-de

Voor 300 euro je oude scooter laten slopen: ‘Gratis geld!’ – Omroep Brabant

Big Banks in the Netherlands Increase Interest on Savings

25 Oct 2022
Actual, EBC, Netherlands

Last week, Rabobank, one of the major banks in the Netherlands, announced an increase in interest on savings. ING and ABN AMRO also follow the biggest interest rate hike In the existence of the euro by the European Central Bank (ECB). This increase by the ECB of 0.75% on all the most important interest rates is on top of the first increase in 11 years in July (+0.5%). By increasing the interest rate, the ECB aims at slowing down economic growth and thus tackling contemporary inflation. What does this mean for the economy, the interest rates on saving accounts, and on student loans?

 

European Central Bank

In the largest interest rate hike ever in the past 20 years of the existence of the euro (+0.75%), the European Central Bank takes action to control and decrease the current level of inflation. This increase in interest is noticeable for the most important interest rates such as mortgage interest, student loans, and saving and bond interests. The ECB expects that these changes in interest rates apply soon to society. However, these changes as initiated by the ECB need half a year to 9 months to be completely visible in the economy, investments, and spending.

This increase in interest rate mainly applies to three key central bank interest rates: 1) the interest rate of the deposit facility, under which banks deposit money at the ECB, will go from 0% to 0.75%, 2) the refinance rate, the interest that banks pay to the central bank when they withdraw money, will go from 0.5% to 1.25%, and 3) the lending rate goes from 0.75% to 1.50%.

As a result of these adjustments in the ECB policy, the negative interest, as introduced by various big Dutch banks in 2020 for savers with more than 100,000 euros in the bank account, has been discontinued. Instead, the interest rate is going up for the bigger banks in the Netherlands.

 

Interest rates

Last week Rabobank announced an increase in interest rates, and now customers of ING and ABN AMRO can also count on increased interest rates from December onwards. Rabobank will increase the interest on saving accounts to 0.25%, and on Regenboogrekeningen, saving accounts for children, this will be 0.35%. Currently, normal saving accounts have an interest rate of 0.01% for amounts under 100.000 euros and on the children saving accounts, this is higher at 0.1% for under 100.000. In both cases, an amount above 100.000 results in no interest at all.

In the case of ING, the interest increases for private savers go to 0.25% until 10.000 euros, 0.15% until a million euros, and no interest above the threshold of a million. On par with Rabobank, ABN Amro increases the interest to 0.25% until a million for private savers. According to ABN CEO Robert Swaak, this step means that “we are returning to more normal waters”, indicating that the current situation of inflation is not healthy for the economy.

 

Student loans

On the contrary, starting from January 2023, around 140.000 former students need to pay off their student loans with an increased interest rate. Whereas it was promised to the students that the loan would have a 0% interest rate this got changed this month. While the promise of the student loan not influencing the application for a mortgage was already debunked previously, former HBO and University students will have an increase of 0.46% on their student loans.

For former students who started paying off their loans in 2014-2019, due to the interest rates being stuck for 5 years, this interest rate will have no effect and maintains 0%. In the case of students studying before the loan system (2015) who pay off the loan according to the rules of the old system and for all MBO former students, they will have to pay a 1.78% interest rate on their student loan.

Whilst these measures should normalise the economy, students feel betrayed by the government and often feel more pressure due to financial issues. Dijkgraaf, the minister of Education, Culture and Science of the Netherlands, understands that students worry about this increase in interest rate, especially now that everything is expensive due to inflation. However, he emphasises, Dienst Uitvoering Onderwijs (DUO) (Education Executive Agency of the Netherlands) takes the personal situation into account. Opinions on this statement are highly diffused.

 

Conclusion

Following the huge increase in interest rates by the ECB, the big Dutch banks establish new interest rates and discontinue negative interest rates (often for great savers >100.000 euros). With a general increase of around 0.25% in interest rates on the saving account by the bigger banks, the aim is to stabilise the current situation and decrease the level of inflation. Whilst this can take up to 6 to 9 months to have a visible effect, the new ECB policy showcases that immediate change is needed concerning the interest rates. Smaller Dutch banks such as the Volksbank, including SNS, Regiobank, and ASN Bank are yet to clarify their position. According to the NOS, the Volksbank mentions that different factors play a role in increasing the interest rate and firstly wants to advise customers and advisors before an increase in interest rate.

In the case of student loans, students are angry about the broken promises and the added financial culprit on top of following their education. Whereas inflation threatens society, students feel that the increase in interest rates on student loans could be the last straw for them.

 

Sources

https://www.nu.nl/economie/6230572/140000-oud-studenten-gaan-rente-betalen-over-studieschuld.html

https://www.rabobank.nl/particulieren/sparen/alles-over-rente/actuele-rentes

https://nos.nl/artikel/2443790-grootste-renteverhoging-ooit-door-ecb-om-inflatie-terug-te-dringen

https://nos.nl/artikel/2449630-spaarders-alle-grote-banken-krijgen-vanaf-december-weer-rente

https://wnl.tv/2022/10/24/abn-amro-verhoogt-spaarrente-ook-na-eerder-al-ing-en-rabobank/

https://nos.nl/artikel/2448853-studenten-moeten-weer-rente-betalen-over-studielening-studentenbonden-ontevreden

https://www.nu.nl/economie/6230682/alles-wat-je-moet-weten-over-je-studieschuld-en-de-verhoogde-rente.html

Key takeaways of the German Supply Chain Due Diligence Act

18 Oct 2022
Current news

The German Supply Chain Due Diligence Act (the Act) mandates companies to identify and assess potential human rights violations and environmental risks within their supply chains by developing effective risk management solutions. In this article we provide a brief overview of the act,  outline which enterprises are required to comply, future application of the Act and how Global Connect Admin B.V. can assist your business achieve compliance.

The German Supply Chain Due Diligence Act “Gesetz über die unternehmerischen “Sorgfaltspflichten zur Vermeidung von Menschenrechtsverletzungen in Lieferketten” (LkSG) was published in the Federal Law Gazette on 22 July 2021 after the parliamentary procedure was completed. This benchmark Act places the responsibility of German enterprises to adhere to human rights obligations in their global supply chains.

At a glance, the Act LkSG obliges enterprises that have their central administration, principal place of business, administrative headquarters, statutory seat or branch office in Germany to respect human rights obligations by implementing defined due diligence procedures.

The Act will initially be applicable to enterprises in Germany with at least 3,000 employees (in 2023) and, from 2024, to enterprises with at least 1,000 employees.

The obligation to adhere to the due diligence procedures applies to an enterprise’s own jurisdictional business area, to the actions of contractual partners and to the actions of indirect suppliers. This extends an enterprise’s responsibility throughout the entire supply chain, and no longer only to the exit of its own factory gate.

The foundation for the Act was already established in 2016, when the German Federal Government launched the National Action Plan for Business and Human Rights “Nationaler Aktionsplan Wirtschaft und Menschenrechte”, (NAP). The NAP is based on the United Nations Guiding Principles on Business and Human Rights. While corporate responsibility lies at the centre of the plan, the state’s obligation to protect the society as well as judicial and extrajudicial remedies, will in combination with the Federal Government, support enterprises in fulfilling this responsibility.

The Act sets defines preventive and remedial measures, makes complaint procedures mandatory and requires regular reporting on the core elements of the due diligence obligations namely, the establishment of a risk management system to identify, prevent or minimise the risks of human rights violations and damage to the environment.

The Act defines a list of eleven internationally recognised human rights conventions and aims to prevent the violation of protected legal rights. These specifically include the prohibition of child labour, slavery and forced labour, the disregard of occupational safety and health obligations, withholding an adequate wage, the disregard of the right to form trade unions or employee representation bodies, the denial of access to food and water as well as the unlawful taking of land and livelihoods.

Failure to comply with their legal obligations, enterprises could face administrative fines up to 8 million euros or up to 2% of annual global turnover for enterprises with an annual turnover of more than 400 million euros. Moreover, if an administrative fine is imposed above a certain minimum level, enterprises may be excluded from the award of public contracts.

The Federal Office for Economic Affairs and Export Control “Bundesamt für Wirtschaft und Ausfuhrkontrolle” is the competent authority equipped with the necessary enforcement instruments to monitor an enterprise’s supply chain management. This institution is permitted to enter a business premises, ask for relevant information and inspect documents. Their far reaching supervisory powers allow them to demand an enterprise to take concrete action in order to fulfil their obligations and enforce this by imposing financial penalties.

The German Federal Government have conducted a business survey which spanned over several years (NAP monitoring) which revealed that only a fifth of all German-based enterprises with more than 500 employees are sufficiently meet their human rights-related due diligence obligations along their supply chains. The Federal Government has agreed to take legislative action at national level and to work towards binding rules at a European level.

The National Action Plan is currently under review in close collaboration with various social groups. The review will seamlessly integrate the Act into the broad overall strategy on business and human rights. Unlike the Act, the NAP is addressed to all enterprises based in Germany and expects them to comply with the due diligence obligations enshrined in it. One focus of the revised NAP will be to support enterprises in their implementation of their due diligence obligations.

The effectiveness of the Act will be evaluated in 2026 where it will be determined inter alia if any adjustments are necessary and whether the scope of application should be extended to other enterprises.

Sources:

https://www.bundesregierung.de/breg-en/federal-government/supply-chain-act-1872076

https://www.csr-in-deutschland.de/EN/Business-Human-Rights/Supply-Chain-Act/supply-chain-act.html

https://www.dlapiper.com/en/us/insights/publications/2021/09/german-supply-chain-act-lieferkettensorgfaltspflichtengesetz/

Photo by Braeson Holland: https://www.pexels.com/photo/harbour-cranes-at-a-port-9775922/

Sustainable Food Systems in the era of the Nitrogen Crisis

11 Oct 2022
Actual, Europe, Japan, Netherlands

In the webinar on “Sustainable Food Systems: how could Japan and the Netherlands create this?” organized by DUJAT, fantastic speakers from Norinchukin Bank Europe, Oost NL, Rabobank and EY-Parthenon have elaborated on the contemporary situation regarding the Dutch nitrogen crisis. This article describes the main takeaways of the nitrogen crisis, reducing the livestock, and the journey into protein alternatives based on Japan-Dutch relationships and opportunities.

 

Introduction

The Dutch government wants to reduce emissions by 50% by 2030 due to the alarming nitrogen levels. These regulations are mainly aimed at cattle farmers since the emission of ammonia is the biggest issue in the scope of tackling the nitrogen crisis. This plan as unveiled on June 10, angers farmers and farmer organisations such as the Farmers’ Defence Force (FDF) as seen in demonstrations, blockades of supermarkets and other parts of the food chain, and road blockages. In early July, these activities resulted in a state of emergency in the municipalities of Apeldoorn and Harderwijk.

To stop the societal unrest, the government aimed to get together with the farmers and related organisations to resolve the issues and negotiate the plan. However, the negotiation led by old-minister Remkes, made it clear on the 5th of October that the coalition is not willing to adjust the measurements and stick to the 50% nitrogen reduction by 2030. The only change is that the map used to determine nitrogen emissions gets dropped.

 

Nitrogen

The alarming levels of nitrogen in the Netherlands have resulted in the nitrogen crisis. However, nitrogen as an element is not particularly harmful to the environment. The compounds NOx (Nitrogen oxides) and NH3 (Ammonia) are the main culprits of harmful nitrogen diffusion. Whereas nitrogen oxides are created in industrial emissions, ammonia can be found in livestock farming. The latter is the most present method of nitrogen emission. Looking into this research, three concepts need to be taken into account: 1) emission: how to get into the air, 2) concentration: the percentage of ammonia in the air, and 3) deposition: how this concentration manifests on the ground.

 

Dutch Government

Nature2000, a European network of protected nature areas, showcases that 74% of the Dutch sites exceed nitrogen values. In Europe, the loss of biodiversity in nature2000 areas is evident. However, high concentrations of livestock farmers in the Netherlands, Belgium and England emphasise the red zones of nitrogen contamination in the soil (deposition).

In response to the nitrogen crisis, the Nitrogen Reduction Targets assure a need for permits for further construction or development of farming activities. Whereas 30% of the livestock needs to disappear by 2030, there are more options to consider. Firstly, the government aims at buying out the farmers to accomplish these goals. Secondly, the farmers can completely relocate their business to either non-polluted nitrogen areas or across the border where more lenient regulations are evident (e.g. Germany). Lastly, the farmers can invest in sustainable farming to limit their nitrogen emissions. In total, the government reserved 24 billion to realise the objectives.

 

Alternative protein

Investing in alternative protein is one manner to limit and decrease the need for livestock farming. In the current beneficial research environment, the Dutch government backs certain research in the public-private relationship and encourages initiatives. There is an increased level of business support and climate as seen in the initiative of The Protein Community (TPC).

 

Four types of innovative protein alternatives can be identified:

  • Plant-based proteins.

Plant-based proteins have been established in the Netherlands with brands such as Vivera. This meat substitute can be created from vegetables such for example peas, beans, and greens but also nuts and seeds. The Dutch consumer is familiar with these brands and protein resources.

  • Fermentation-based proteins

This type of protein is the usage of microorganisms that reproduce through the process of fermentation as ingredients for alternative proteins. An example is using algae to make fermentation-based protein. While this sector is new and scale-ups are common, collaboration with the big culture is not unusual.

  • Cell-culture proteins

The factory-produced protein is remarkable in the method of “printing meat”.  Using a controlled condition where protein cells can grow, manufacturers worldwide are racing to create culture proteins that are identical in taste, texture, and nutrition to animal-based protein. In the Netherlands, Mosa meat is the innovator in this fairly new product type.

  • Insect-based proteins

The insect counterpart to meat consumption is a normalized part of the diet in Asian countries. However, crickets or other insects yield high protein and can be used in a variety of protein powders or high-energy products. Consumers in the Netherlands are not used to insect-based protein and might need years to fully develop to be part of ordinary life.

 

Conclusion

With 24 billion available to tackle the nitrogen crisis, the Dutch government is determined to cut nitrogen emissions by 50% and livestock by 30% in 2030. Farmers and the Dutch government have tried to negotiate the approach and measurements but remained almost identical. Options for farmers entail being bought out, relocating or investing (more) into sustainable farming solutions. Knowing the societal pressure to reduce nitrogen emissions, investment and further development into sustainable protein alternatives can resolve the decrease in livestock farming. For more information about Japanese pioneers in the field of alternative protein, we kindly refer you to DUJAT to assist you optimally.

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