The New ESG: Why Dutch Bankers Are Now Talking Tanks

The Post

The Netherlands has long been Europe’s model of commercial pragmatism. Its business leaders built their fortunes on free trade, open markets, and meticulous efficiency. So when The New Zealand Initiative’s “Go Dutch” business leaders delegation arrived in Amsterdam late last month, we expected familiar conversations about productivity, innovation, and regulatory reform.

Instead, we discovered that the preoccupations of Dutch business have dramatically shifted. The transformation reflects as much on our times as it does on Dutch pragmatism.

Stefan Decraene, the chair of the managing board of Rabobank, delivered a telling presentation on risk. He did not once mention customers or credit. He talked about geopolitics – about Putin, about Trump, about Iran. Strategic disorder, not market volatility, was the central concern.

At Euronext, the Amsterdam Stock Exchange, the message was loud and clear. Speaking to our delegation, CEO René van Vlerken, put it crisply: “These days, ESG means Energy, Security and Geostrategy.” For the Dutch, the dominance of the old ESG – environment, social and governance – is over. The line was offered with a smile, but it was no joke. It captured a shift in mindset visible throughout Dutch public life.

In the Netherlands today, geopolitical risk is not something to be managed at the margins. It is central to national planning. Across politics, finance, infrastructure and industry, the Dutch are recalibrating for a more dangerous world.

Our delegation’s timing was apt. We arrived in the same week that NATO leaders were convening in The Hague for what may prove a historic summit. In the immediate aftermath of American airstrikes on Iranian nuclear facilities, and with Putin’s war on Ukraine entering its third year, the alliance made a defining decision: to lift member countries’ defence and security spending to 5% of GDP.

For decades, NATO had encouraged 2% – a target few met. The new threshold is more than double that. It reflects a blunt reality: stability now requires investment. Of the 5%, 3.5% is to be spent on core military capabilities, and 1.5% on resilience, infrastructure, and cyberdefence. It is a redefinition of seriousness, codified in spreadsheets.

The Netherlands itself provides a case study. Underinvestment has left it without a single operational tank. But the Dutch are now reconstituting a tank battalion, budgeting €1–2 billion for Leopard 2s. Their 2024 defence budget reached 1.95% of GDP, and there is more to come.

Estonia is heading for 5.4% of GDP. Poland has already hit 4%. Germany’s €100 billion Zeitenwende – or “turning point” – will see its military rebuilt after years of neglect. Defence spending, long regarded as outdated or distasteful, is once again seen for what it is: a prerequisite for security and prosperity.

At the NATO summit, President Trump pushed hard for the 5% target. European leaders did not agree to appease him. They agreed because they had run out of excuses. Putin has changed the world.

And not just in Europe. In the Pacific and elsewhere, strategic risk has risen sharply. China has become more assertive. Iran more unpredictable. North Korea more provocative. The logic behind NATO’s rearmament extends to any democracy that values its sovereignty – which brings us to New Zealand.

Prime Minister Christopher Luxon attended the NATO summit as part of the Pacific Four. He was the only leader from that group to attend in person. The night before, he joined our delegation at a Matariki celebration hosted by the New Zealand Embassy in Leiden – one of the Netherlands’ oldest cities.

It was a moment of contrast. As NATO prepares to double its defence commitment, New Zealand’s presence in Europe is still framed more by cultural reflection than strategic resolve. That is not a criticism. But it is a reminder: in this new geopolitical environment, symbolism is not enough.

That distinction matters. Cultural diplomacy has its place. But in a world of escalating risk, reassurance must be matched with resolve. Fortunately, the government seems to understand this. Defence Minister Judith Collins has spoken candidly about the state of the Defence Force—describing it as the victim of “35 years of cuts and underfunding.”

A new capability plan will nearly double annual spending, aiming to reach 2% of GDP within the decade.

By NATO standards, that is modest. But in New Zealand terms, it is a revolution. We have long treated defence as discretionary. In a 5% world, even 2% signals a shift.

And this is where the “new ESG” framing earns its keep.

The old ESG was a well-meaning attempt to encourage long-term thinking in business. At its best, it promoted stewardship, sustainability, and corporate ethics. But it often devolved into box-ticking and reputational theatre.

The new ESG is more demanding. Energy must be secure. Security – including cybersecurity – must be real. Geostrategy demands a clear-eyed view of risks, interests, and alliances.

This version of ESG does not moralise. It prioritises.

We saw the mindset shift in the Netherlands. Not just in Rabobank’s boardroom or at Euronext, but in how seriously Dutch institutions now take resilience. From food and energy security to military readiness and cyber resilience, they are rethinking what matters.

If we are serious about security and prosperity, we will need to lift our game – not just in defence, but in energy, infrastructure, and cybersecurity.

That does not mean abandoning environmental goals or governance principles. But it does mean recognising that human flourishing depends on order – and order depends on energy, security, and strategic coherence.

The age of illusions is ending. The age of capability has begun.

This column was first published by The Post on 10 July 2025. To read it on The Post’s website, please click here.