"Not requiring a company pay, in some form, the cost of their externality costs is an active policy decision."

No, it's a passive policy decision by definition.

Why? What definition?

The refusal to collect costs those polluters put on everybody is as active an decision as the decision not to collect taxes (tax breaks) that you'd otherwise use to keep the country running for everybody.

It's an active policy decision to have the state stay passive and do nothing.

Choosing not to make a choice is a choice itself - additionally this portion of policy has been heavily debated societally - it's not like we're talking about something so obscure that actually opening up a discussion on it will require a heavy expenditure of labour to properly research the topic.

It's an active policy decision in any country where a proposed "polluter pays" type law has been voted down.