ABN AMRO's approach and policy for companies in the palm oil sector

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Today, Monday 2 July, various media published reports about investments by and through banks in companies that operate in the palm oil sector. ABN AMRO has been mentioned as well. In ABN AMRO's view, palm oil should be produced as sustainably as possible. Since palm oil is an ingredient in a vast range of products, calling for a boycott of all palm oil is not a realistic option. So while palm oil production is a vital sector, a lot of improvements can and should be made in terms of sustainability. Guided by our sustainability policy, ABN AMRO is trying to help achieve these improvements, and we are pleased that other parties involved are increasingly doing the same.

ABN AMRO’s special sustainable lending policy

A handful of companies in the palm oil sector are clients of ABN AMRO. These are all large companies with comprehensive sustainability policies. Companies that cannot or will not meet the requirements of ABN AMRO's sustainability policy are not accepted as our clients. Furthermore, ABN AMRO maintains a special policy for financing companies that operate in the palm oil sector. The policy's intent is to exclude sustainability risks such as unauthorised deforestation and land grabbing. Companies that wish to become clients of ABN AMRO also have to join the Round Table for Sustainable Palm Oil (RSPO). The purpose of the RSPO is to rally all relevant parties in the industry for progress towards sustainable production of palm oil.

Compliance with the bank’s sustainability policy

ABN AMRO assesses clients on compliance with its sustainability policy. In those cases where a company falls short, it follows up with a so-called engagement process. By engaging, the bank uses its influence to change the situation together with the client. If the goals have not been achieved by the deadline set, the ultimate consequence is that the client relationship can be ended. To learn more about ABN AMRO's engagement processes, read the engagement report​ (PDF 78 KB).

Client investments

ABN AMRO does not trade in securities for its own account. What ABN AMRO does do is facilitate and advise clients who want to invest their own money, and ABN AMRO also manages assets for clients. Where clients opt for the bank’s investment advisory services, it is ultimately up to the client to make decisions. ABN AMRO explicitly encourages its clients to invest sustainably. For new clients, a sustainable investment profile is now the standard. Last year, the bank set new objectives and made a plan of action One of the choices offered to clients is investing in a so-called mandate fund. The asset selection for these funds is performed by external asset managers, selected by ABN AMRO Investment Solutions (AAIS).

In the event that such external asset managers invest in unwanted companies, ABN AMRO seeks to speak to the external managers about their policies and about the possibilities they have to engage with the relevant company.

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