Social is the new green

Last week we published our Social Impact & Human Rights Update, along with the publication of our 2021 Integrated Annual Report. In this update, we describe how our activities have an impact on vulnerable groups. We also discuss the social challenges in our society and the role ABN AMRO plays in these. We talk to Gitte Wouters and Yuri Herder of Group Sustainability about social impact, the third sustainable topic in addition to climate and circularity.

The report is entitled ‘Accelerating Social Sustainability’. What’s behind that title?

Gitte: “Sustainability as a social factor has built up a good head of steam over the past year. The coronavirus crisis has made clear that we can all find ourselves in a vulnerable position, for example through illness or financial setbacks. And this leads to greater involvement in social initiatives. Across the financial sector as a whole, you can see that the social aspect is now starting to get the attention it deserves. This is reflected throughout the bank, from procurement to our products. For example, Joop Hessels from Markets talks in our report about the current popularity of ‘social bonds’, where in the past we only talked about ‘green bonds’. As Joop tells us, “Social is the new green”

Yuri: “In our discussions with business clients, we can also see that social issues such as working conditions and exploitation are getting more and more attention. Joost Leupen, one of our relationship managers for the hotel industry, explains in the report how we contribute to the fight against trafficking in women. In the past year, awareness and involvement around these topics has increased significantly among our staff.”

How would you describe our social impact policy?

Yuri: “At the heart of the matter are the words ‘do no harm and do good’, meaning start by respecting the basics in everything you do: make sure you don’t have a negative impact on society and people’s rights, including through your clients and suppliers, or the investments you make. From that basis, you can do the right thing – that’s to say, make a positive impact through social initiatives or investments. This is something we ask not only of ourselves, but also of our clients. So we work on two tracks.”

The report describes social initiatives in such areas as debt, equal rights, and access to the financial system. It’s striking that all of these issues are so close to home. What was behind these choices?

Gitte: “We are a bank that is part of society and so we also deal, directly or indirectly, with vulnerable groups. When you see how many people we are connected to... five million personal clients, thousands of business clients, not to mention the people in their supply chains, our own employees, our suppliers, and so on. And then there are the people who work at the companies we invest in on behalf of our clients. Most of those people get by just fine, but there are vulnerable groups, also in the Netherlands. Just look at the debt problem, or the rapid digitalisation that is making it less easy for elderly people to access the financial system. As a bank, we can and we must play a role for these client groups. With our budget coaches and financial care coaches you can see that we are serious about this.’

What about our impact further from home?

Yuri: “The supply chains of our business clients and suppliers are often organised globally. That’s why we keep up a constant dialogue with them about social risks in countries where it is less clear to us what is going on. We also have an impact as an investment service provider for our clients. With the choices we make in this regard, we can drive improvement in businesses. This is often also about human rights. So we work together with Federated Hermes, a party that enters into discussions with companies on behalf of many investors to improve their impact. Because they represent enormous assets their approach has considerable effect.”

What’s the most powerful thing we’ve done in the past year in terms of social impact and human rights?

Gitte: “It’s hard to name just one thing. It is extremely valuable that awareness on social impact has increased significantly. As a result, we see activities and products emerging throughout the bank. As a bank, we do a lot in the field of diversity and inclusion, which makes us a pioneer in the financial sector. For example, we are committed to gender equality and to helping people with a disadvantage on the job market and residence permit holders. And our Sustainable Finance Desk has started incorporating the social element into credit facilities this year. This means that you can, for example, get an interest discount if you hire people with a disadvantage on the job market and achieve your target. Because we as a bank lead by example in these areas, we can also discuss these matters with our clients. For me, this ties up everything nicely.”

Yuri: “What I’m most proud of is the approach we’ve taken regarding the exploitation of migrant workers. We made that a clear topic last year. Migrant workers, especially those from Eastern Europe, often find work in the Netherlands through employment agencies. From there they end up in all kinds of sectors, in agriculture – both on the land and in the greenhouses – and in construction, transport, retail, industry and catering. They often have difficulty communicating and reading contracts, which makes them particularly vulnerable. Together with a number of partners, we’ve been working hard on this problem. We have, for example, developed a data model together with the University of Amsterdam that identifies labour exploitation. And, together with a number of partners, we have tightened up our client acceptance criteria for employment agencies. The thematic approach has greatly increased awareness about labour exploitation among our staff.”

What does the war in Ukraine mean for our social impact activities this year?

Gitte: “How refugees fleeing to the Netherlands will be able to open a bank account in the Netherlands is currently being discussed between the major Dutch banks and the Dutch Payments Association, for instance. But I’m also thinking of people who get into financial difficulties because of their high energy bills. We will have to pay extra attention to this with our budget coaches.”

This is probably not the first time you’ve heard this question: What’s in it for us when it comes to social-impact activities?

Gitte: “We get that question a lot, and it’s fair to ask. What’s in it for us is, first and foremost, social value. We contribute to the wellbeing of our clients and this includes, for example, an increase in our NPS. If you consider the debt issue, it’s also a matter of trying to reduce the number of clients defaulting on their loans. That is also financial value. But the most important thing in my opinion is that, in this regard, we take our social responsibility seriously. Social impact delivers much more than just financial value.”

Yuri: “In addition to asking ‘What’s in it for us?’, we also have to ask: ‘What will we lose if we don’t take our social responsibilities seriously?’ We then run all kinds of risks: legal, operational, reputational, and so on. That all costs money. Of course, we also see clear commercial business cases in the field of social impact: they are certainly out there. Social bonds are a good example of this. So, doing good will certainly pay off financially too.”