ABN AMRO and palm oil

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On Saturday 20 October, the investigative TV show Kassa will cover a report by SOMO/Milieudefensie (Friends of the Earth Netherlands) about palm oil. ABN AMRO features both in the report and in the debate. We have turned down an invitation to come to the studios as neither SOMO/Milieudefensie nor Kassa has sent us the report for us to read and prepare. ABN AMRO considers the importance of this issue to be so significant that it has sent the following statement, despite the fact that it is hard to respond because the bank hasn’t seen the report.

ABN AMRO feels that palm oil should be produced as sustainably as possible. Calling for a boycott of palm oil is not realistic, as it is used in a multitude of products. In the Netherlands, we use scores of products containing palm oil on a daily basis, and consumption per Dutch person is estimated at some 16 litres of palm oil per year. To date, no alternative is available that is more sustainable. In its lending policies, ABN AMRO explicitly excludes land grabbing and illegal deforestation, two important potential negative effects in irresponsible palm oil production (the same goes for coffee and cocoa, by the way). We don’t want anything to do with these practices. Go to the ABN AMRO website for these policies, which incidentally were classed as the best in the financial industry by Greenpeace last year (page 59 of the report

If we identify issues at a company or in its supply chain that run counter to our sustainability policies, we will engage with this company on the issue. If this does not produce the desired result, our ultimate conclusion may be that we let the client go.

Investments

Investing is a different story altogethere. ABN AMRO does not invest for its own account. Whenever there’s any reference to investing, we are talking about the investments of our Retail & Private Banking clients. These clients can hold their investments with ABN AMRO and are given a choice as to whether they make their own investment decisions or whether they mandate ABN AMRO to manage their assets. At the end of the day, however, it is up to our clients to decide how they invest and in what assets. 

We always make a point of encouraging our clients to invest sustainably, and new clients are offered a sustainable investor profile as the standard option. Last year, we set new goals and a plan of action on this issue. In the case of investments in a company in breach of one or more of the ten UN Global Compact principles, we will initiate engagement with this company.

Mandates

In a number of cases, ABN AMRO clients invest in investment mandates or multi-manager funds offered by ABN AMRO, for which the investment selection is carried out by external asset managers. These external asset managers observe their own criteria when constructing these portfolios. We are investigating how we can impose our sustainability criteria on external managers, which is not yet the case. We see this a next step-change in making our investment portfolios more sustainable, both those we manage ourselves and those we only advise on, in compliance with our role as a signatory of the UN Principles for Responsible Investments (PRI). Our actions can have major consequences for our clients’ investment portfolios and so we tread very carefully here, naturally considering any pre-existing client agreements. ABN AMRO will then also discuss the possibility of a changeover from traditional to sustainable investing.

Sustainable investing at ABN AMRO

New clients are offered a sustainable investor profile as the standard option. In addition, ABN AMRO clients have access to a wide range of companies that boast a sustainability indicator. The indicator reflects research by Sustainalytics and provides insight into a company’s or investment fund’s average environmental, social and governance (ESG) score. 

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