Quantifying improvements in sustainability with Impact Based Banking

For ABN AMRO to help clients on the road to a sustainable future, it’s vital that the sustainability measures can be quantified. That’s why the bank has formed a partnership with sustainability platform Ecochain, called Impact Based Banking.

Boudewijn Mos, one of the co-founders of Amsterdam-based Ecochain Technologies, uses data to tell the story of what’s really happening with sustainability. The goal of his company, which he helped set up in 2011, is to abolish the myths and lack of formal structure that are such frequent issues whenever sustainability is discussed.  He uses an advanced proprietary mathematical model to calculate the unique footprint of numerous products worldwide. That ‘footprint’, according to Mos, represents “the inefficiency with which we utilise our raw materials”.

Quantify for better understanding

Ecochain’s platform can be used by virtually any type of company that wishes to quantify and report on its sustainability progress.

In 2018, ABN AMRO invited ten of its clients to take part in a pilot project it had organised together with Ecochain that reviewed the clients’ processes, energy consumption and cost flows. Where the products and processes have a large footprint, Ecochain can be used to calculate the effects of more sustainable alternatives, including how much will need to be invested and what the savings will be, both financially and for the environment.

“We start with a baseline measurement,” Mos explains. “Then we analyse what adjustments we need to make to diminish the footprint and increase profits.”

Ignorance

Ecochain’s platform draws data about production and energy levels from an ERP (enterprise resource planning) system, and then allocates those data to the organisation’s various operations. This provides a detailed overview of the sustainability of the organisation’s processes. The clients that took part in the Impact Based Banking pilot varied from a crop farmer to a large manufacturing plant with hundreds of complex processes. 

Sector Banker Jan de Ruyter, of ABN AMRO’s Plant-Based Sectors & Fisheries, had high expectations. “If we want to help the bank’s clients to make the transition to sustainability, they need to be able to base their investment decisions on objective sustainability data. Much is still unclear, and in some sectors sustainability is surrounded by a lot of nonsense. If we have the data, we can show the actual situation and identify where we can help our clients.”

Positive impact

The pilot was a success. Although the data have not all been finalised, possibilities have been identified at five of the companies for reducing carbon emissions by a total of 89,000 tonnes. The participating clients gained new and valuable information and – more importantly – put that information to use. Based on these results, this spring ABN AMRO and Ecochain moved on to the follow-up phase. The next goal is to involve a hundred clients in Impact Based Banking.

“We found something at each and every company that its management had never thought of before,” explains Mos. “Normally, relative to the footprint of a company’s end product, the company’s own impact is between 5 and 20 percent. For a client from the metal industry, that impact was a staggering 83 percent. That’s great: it means that the company can control most of the factors, and that the measures it takes in its own organisation will have a tremendous positive impact.”

The pilot also revealed some surprises, according to De Ruyter: “A pig farm’s processes were very effectively organised. The company reuses large volumes of waste to generate green energy. These are good examples that we carry over to other clients in the sector.”

Encouraging

Companies that have already made great strides to improve their sustainability can also benefit from Ecochain’s platform. Even businesses that have made the transition sometimes want to know how much their measures are saving them. “We reviewed the figures for one company,” says Mos. “The result was extremely positive. That was very encouraging for the owner, who had made huge investments.”
 
De Ruyter looks forward to continuing the partnership. “Improving sustainability puts a strain on businesses, but once the information starts to emerge and results are achieved, everyone sees how important it is.”
 
ABN AMRO helps clients to finance their sustainability investments. Get in touch with your account manager at ABN AMRO if you would like to take part in Impact Based Banking.