If you have ever bought shoes online, you will know that your shoe size varies per brand. Even different models from the same brand can show some variation, as I discovered recently when my new tennis shoes were delivered. The parcel deliverer was not too bothered about the extra work – obviously - but I was less than impressed. Sustainability worldwide is facing some similar challenges. Across the globe, different organisations use different 'size charts'. ABN AMRO naturally wants to know how well the bank is scoring on various sustainability and transparency factors. That’s why we are participating in a number of external sustainability benchmarks and ratings.
ABN AMRO aspires to be in the top 15% best-scoring banks in the Dow Jones Sustainability Index by 2017.
Herma van der Laarse Sustainability Reporting Specialist
Deforestation versus workplace safety
When you think about it, it is strange that it is so difficult to measure and compare something so important. And I don’t mean shoes. By now, everybody has received the memo that we ought to be mindful of how we treat the planet – certainly now that the climate conference in Paris has come and gone. So why do we not yet have any universal standards? I believe it’s because sustainability is a very broad concept in which various parties have various perspectives and angles. Do you use palm oil in your products? Deforestation of tropical rainforest is probably one of your focus areas. Yet if you work in the textile industry, other issues such as unsafe working conditions or extremely long working hours in sweatshops are more relevant topics to you. Because of the many aspects of sustainability, comparing different companies can be like comparing apples and oranges.
Meanwhile, translating sustainability into hard figures is a challenge in itself. What exactly do you measure? What are the parameters that define doing okay, and doing great? Considering the abundance of agencies that provide sustainability ratings and benchmarks, we can say for certain that it has been tried many times in a lot of different ways. However, this only clouds the issue for consumers and companies alike. What I believe is key: creating clarity, to enable everybody to make sustainable choices based on correct and relevant information. No matter whether you are an investor, a procurement specialist, or a consumer.
Insight in our score
The way I see it, ABN AMRO is on the right track when it comes to sustainability and transparency. Still, assessing yourself remains a tricky thing to do, because it is so easy to view yourself through green-coloured glasses. To make sure we get the full picture, we have decided to actively participate in external sustainability ratings and benchmarks. The difference in a nutshell: ratings assign us a score, and benchmarks show our relative position in a ranking. Ordinarily, the assessment process takes place on invitation, but agencies occasionally assess companies remotely. In order to get more out of this process, ABN AMRO decided to actively participate in four reputable sustainability ratings.
While sometimes tough to swallow, the outcomes of benchmarking and rating exercises like this are highly useful to the bank. They tell us how well we are measuring up against others and what room for improvement there is. Besides, they provide useful information to our investors, customers, and society at large. My colleagues from Investor Relations pointed out another benefit: investors and their clients increasingly want insight into our performance and into the standards we uphold for the companies and foundations that we do business with. Sustainability is increasingly becoming a regular factor weighing into business and consumer buying decisions. Good news, because it means sustainability is no longer seen as whim of fashion.
Because sustainable benchmarks and ratings contribute to our continuous improvement on sustainability and transparency, we have embedded our participation in strategic ambitions. Out of all the participating banks, ABN AMRO wants to be in the top 15% best-scoring banks in the Dow Jones Sustainability Index by 2017. A related direct point for improvement is our participation in the Carbon Disclosure Project: a benchmark with criteria that help us get a better idea of our environmental footprint. We are glad to report that over 2015, our DJSI score has lept from 53 to 78 points on a 100-point scale. With 78 points, we are among the top 25% best-scoring banks worldwide.
Regarding transparency, our goal is to score over 180 out of the 200 points on the Dutch Ministry of Economic Affairs' Transparency Benchmark. And last but not least, we are participating in the FTSE4Good, which, like the DJSI, assesses the bank on Environment, Social and Governance (ESG) criteria. Together, these four major and well-respected sustainability ratings form a framework of standards that we actively hold ourselves up to.
If the shoe fits...
I consider these scores to be feedback on our sustainability behaviour and policies. DJSI provides an ideal guideline to translate a strategic ambition into policy and action. ABN AMRO aims for positive recognition with regard to transparency and sustainability. Changes are not always made overnight; some ask for tact, patience, and tenacity. We operate in several chains, some of which are complex and convoluted, and involve a staggering number of parties. So, naturally, we sit down and enter dialogue so we can start realising improvements – but some of these things require a little more time. Our approach is one of continuously improving, as we work our way towards an ideal and universal 'size chart' to measure sustainability. Until then, as long as careful and diligent measuring helps us find the right fit, I will gladly continue to help the rating and benchmark agencies tell it like it is.