ABN AMRO Group

RATING

SECTOR

Banking

WEBSITE

CONTACT

Gustav Mahlerlaan 10, 1082 PP,
Amsterdam, The Netherlands

Tel: +31 10 241 1720
Fax: +31 20 628 7740

STOCK EXCHANGE

LISTING

The company does not have any lisitings.

EMPLOYEES

17,813

 

DIRECTOR SUSTAINABLE BANKING

Richard Kooloos

 

AWARDS

  • IEX Gouden Stier (Golden Bull) | Best Choice
  • Winner WUA ‘Digital Sales Scan’
  • Beste aanbieder duurzame producten
  • Cash Publieksprijs (the audience award)
  • Finner’s 2020 ratings
  • IEX Gouden Stier (Golden Bull) | Best choice in the Mixed Funds category
  • IEX Gouden Stier (Golden Bull) | Broker of the year
  • IEX Gouden Stier (Golden Bull) | Investment firm of the year
  • Thomson Reuters Lipper Fund Award 2019
  • Finner’s 2019 ratings
  • Thomson Reuters Lipper Fund Award 2018
  • IEX Gouden Stier (Golden Bull) | Best choice in 2018
  • IEX Gouden Stier (Golden Bull) | Winner of the people’s choice award in 2018
  • Thomson Reuters Lipper Fund Award 2017
  • Thomson Reuters Lipper Fund Award 2016

CONTENT SOURCE

FURTHER READING

Report created by Georgie Murrin

 

ABN AMRO Group

SECTIONS :  Sustainability Targets    Evaluation  •  Key Points  •  Overview

 

Company Activity

ABN AMRO Bank N.V. is a Dutch bank with headquarters in Amsterdam. ABN AMRO Bank is the third-largest bank in the Netherlands. It was re-established in its current form in 2009, following the acquisition and break-up of the original ABN AMRO by a banking consortium consisting of Royal Bank of Scotland Group, Santander Group, and Fortis. 

Following the collapse of Fortis, who acquired the Dutch business, ABN AMRO Bank was nationalized by the Dutch government along with Fortis Bank Nederland. It was re-listed as a public company again in 2015.

The bank is a product of a long history of mergers and acquisitions that date back to 1765. In 1991, Algemene Bank Nederland (ABN) and AMRO Bank (itself the result of a merger of the Amsterdamsche Bank and the Rotterdamsche Bank in the 1960s) agreed to merge to create the original ABN AMRO. 

By 2007, ABN AMRO was the second-largest bank in the Netherlands and the eighth-largest in Europe by assets. At that time the magazine The Banker and Fortune Global 500 placed it 15th in the list of the world’s biggest banks and it had operations in 63 countries, with over 110,000 employees.

Company Sustainability Activity

This is ABN AMRO Group’s third annual Impact Report, setting out the results of their 2020 impact assessment. Through their Integrated Profit & Loss Statement, it details the bank’s impact – both positive and negative – on its four main stakeholder groups: clients, employees, investors, and society as a whole. This impact derives from ABN AMRO’s role as a provider of banking and investment services, an employer, and a gatekeeper to the financial system.

ABN AMRO recognizes that it is no longer enough for companies to simply make money. They must contribute to society – and ABN AMRO is no exception.

A company’s long-term license to operate depends on its ability to create value for all stakeholders – not just investors, but also clients, employees, and business partners. They recognize that their activities may also cause damage to the environment, or increase consumption of natural resources.

ABN AMRO aims to maximize their positive effects by being a force for good, which is why, in their strategy, they are also extending more sustainable financing, investing more in renewables, and expanding their social impact investing

Their results from their 2020 impact assessment show that, despite Covid-19, they have continued to create significant value for clients, principally through loans and mortgages. Employee well-being also increased – a vote of confidence in their handling of the crisis, though the impact of the pandemic on financial performance and share price inevitably reduced value for investors.

They are aware that their impact report still has room for growth, as compared to traditional financial reporting there are some uncertainties. However, this year shows great progression and further refinement of data sources and improved analysis of their results.

In summary, they view this impact report as highly valuable because it allows them to understand the trade-offs involved in creating value for our stakeholders. In doing so they aim to allocate resources more effectively and achieve their goal of building a better, more sustainable economy.

Highlights

  • ABN AMRO created less value for stakeholders in 2020 compared with the previous year. This was due mainly to lower profits and a significant decrease in the bank’s share price, affecting equity investors in particular
  • Employee well-being was higher in 2020 – there was evidence of improved engagement, a vote of confidence in the bank’s internal handling of the pandemic
  • Among clients, mortgage holders benefited from lower interest rates, reducing the cost of homeownership compared with renting
  • Their impact on natural capital was largely unchanged compared with 2019
  • Their negative impacts relate to pollution, the use of natural resources, and climate change and these incurred primarily as a result of the bank’s lending and investment services to clients
  • In 2020, the bank continued its efforts to limit these effects – by supporting sustainable business and ensuring strict social and environmental conditions on lending and investment services
  • They produced a negative impact in contrast to 2019 within their ‘social sector’; including customer loyalty, impact on social issues such as child labor, low pay, and financial distress
  • They experienced losses in social value – through discrimination, underpayment, and child labor in ABN AMRO’s value chains – decreased slightly due to less exposure to sectors with high social risks
  • For society, ABN AMRO increased purchases from outside suppliers, particularly security and custodian services
    • This led to a drawdown during the year of manufactured value
    • Elsewhere, ABN AMRO had a negative impact on society through, for example, damage to the environment, incidences of low pay, or discrimination among clients or business partners and this remains broadly unchanged, compared with 2019

Targets

The company does not disclose this information.

Progress

  • ABN AMRO plans to increase the well-being effects of employment, as well as an increase in the creation of human capital from this past year
  • The bank aims to increase within SDG 8 (Decent Work and Economic Growth), employee payments, tax payments, and client value of money transfers
  • Everything else appears to be the same or negative in comparison to the year before

Certificates

The company does not disclose this information.

UN Sustainable Development Goals

UN SDGs Compliance

In 2019, ABN AMRO carried out an initial baseline analysis to measure their contribution to these goals. 

SDG 1: No Poverty

  • The only comment in regards to this goal is that they have an overall negative impact due to ‘underpayment’

SDG 8: Decent Work and Economic Growth

  • This year’s report showed that they have continued to have a positive impact on SDG 8 – through employee payments and by providing banking and financial services to their clients
  • Additionally, the increased human capital added value in preventing bankruptcies due to Covid-19 financial support measures

SDG 12: Responsible Consumption and Production

  • Their only comment on responsible production and consumption is that they have had a negative impact on their use of scarce materials, which was the same as in 2019’s report
  • Additionally, they suggest they offer significant financing to support businesses’ switch to more sustainable operating models, as well as offering circular economy deals to reduce waste and consumption 
  • They have continued to invest in more renewables through their energy transition fund, as well as setting the goal to reduce emissions from built environments by 2030 
  • By the end of 2020, 21% of their energy portfolio was renewable
  • As well as 2020 being a record year for sustainable capital markets, they issued more than €10 billion in sustainable bonds, in contrast to €2 billion green bonds in previous years 

SDG 13: Climate Action

  • ABN AMRO states that they have had a negative impact this year, as with 2019, with their contribution to climate change 
  • Despite this, they have chosen to focus on this SDG, highlighting the positive work they have done over the last year to limit climate change impacts through the alignment with green certificates 
  • However, despite this, they have continued to have a negative use of scarce materials, with little data on how they intend to move forward from this 

SDG 17: Partnerships for the Goals 

  • They have included relevant SDG’s in their report, which shows partnership, however, there is little mention of their own goals related to the SGD’s
  • They do state that they have had a positive impact on employee payments and income tax payments

Evaluation

In 2020, ABN AMRO took a number of steps to formalize its approach to sustainability. They established a Sustainability Advisory Committee, updated their Sustainability Risk Policy for Lending and Project Finance, and set up a formal engagement committee for Commercial and Corporate and Institutional Banking. 

They also launched Sustainability Acceleration Standards (based, in part, on the EU’s new taxonomy). These standards are aimed to help harmonize their approach to sustainability; at present, they are in operation in both their Commercial Banking and their Corporate & Institutional Banking businesses.

ABN AMRO’s strategy focuses on a strategic pillar, comprising future proofing, sustainability, and customer service. That said, they do not address the four pillars of sustainability. They lack any certificates to illustrate their sustainability approach, and they do not have any listings. They have several awards from the last few years, however, these are not specifically sustainability-related, rather recognition for their business approach. 

They do, however, advertise their approach to sustainability through three key elements; climate change, circular economy, and social impact.

Over the next few years, ABN AMRO is aiming to expand their sustainable financing, as well as increasing project financing, in addition to renewables for mid-sized to large Dutch corporates, and extend sustainable, ESG, and impact investment options for their clients.

At the same time, they are aiming to increase the number of circular economy deals they are negotiating, particularly through leasing and product-as-a-service transactions. 

For their 2024 strategy, they are aiming to set ambitions on social impact, focusing on financial inclusion, supporting equal opportunities, and financial resilience. 

For 2021, they do not have clear set strategies and goals, but it is clear they are aiming to set them for years to come. 

Although they do attempt to comply with a few of the 17 UN Sustainable Development Goals, their efforts fall short to make innovative sustainable changes within the business. 

With that said, their report can be commended for their transparency, as it highlights the areas where they are creating positive change, but does not shy away from noting where they fall short and have a negative impact in regards to the SDGs (for example with their ‘underpayment’ and negative impact towards SDG 1: No Poverty).

ABN AMRO has been rated a D.

Analyst Outlook:  Neutral

Based on ABN AMRO’s report from this past year, this analysis suggests they are rated ‘neutral’ due to a lack of sustainability certificate, and lack of compliance to more than 3 of the SDG’s and minimal effort in their approach towards mitigating even those they have chosen to focus on.

Key Points

  • In 2020, they established a Sustainability Advisory Committee and updated their Sustainability Risk Policy for Lending and Project Finance
  • ABN AMRO’s strategy focuses on a strategic pillar, comprising future proofing, sustainability, and customer service
  • ABN AMRO does not take a sustainability pillar approach and does not have any certificates or listings or specific SDG-related awards 
  • They have made progress over the past four years, and have set goals to meet for 2024 such as; increase client ESG and Impact investments to €46 billion and increase financing for circular economy deals to 3.5 billion
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