Banks need to engage more in
the regulatory/political dehate
about the future of banking^
Arjo Blok:
Grass roots banking
4
internally and externally, but the credit crisis and subsequent
recession have caused many to question the financial industry's
ability to operate in a sustainable manner. As Sipko Schat points
out, sustainability is a major theme, and one that is at the top
of the agenda of many companies and governments around
the world. However, he aiso notes that it's often oversimplified.
"Sustainability is not one issue, it's a number of often quite
complex issues. In our main sector, F&A, these are primarily food
safety, the production of sufficiënt amounts of food, and the food
chain. In other words, can food production be traced from the
farmer all the way through to the consumer? Is it being sourced
and produced in a sustainable manner? And are we doing all
we can to promote sustainability along this chain? Rabobank is
clearly well positioned in this area, given the knowledge we have
of our clients, our involvement at every stage of the process, and
the expertise we have within our F&A research group (FAR)."
According to Arjo Blok, the issue of sustainability is closely linked
to the public's perception of banks both locally and regionally.
And despite a softening in the public's opinion towards the
financial sector, he believes banks themselves need to focus
more on the role they play in society. "Banks need to take the
responsibility to explain what it is they do, and how important
they are to society. They also need to engage more in the
regulatory/political debate about the future of banking. If they
don't, then either the politicians or the regulators will impose
restrictions on the sector, and in the long run I don't think this will
serve our clients, ourselves and the economy well."
The question of whether banks should re-address their priorities
and focus more on contributing to a more sustainable society,
rather than chasing ever-greater profït targets, has been asked
in many different ways over the past 24 months. However, it
overlooks one very important point, Sipko Schat believes. "Put
simply, a bank can't survive without making profït, and we've
made a profït at Rabobank for the past 110 years. Making a
sustainable return on your core business is critical, and at
Rabobank we manage that. And it's very important to recognise
that while doing so, we contribute to society in the Netherlands
and globally."
One example of this is Rabo Development, which takes stakes
in partner banks to help develop both the financial sector and
promote the development of rural economies in developing
countries. Another example is Rabobank's community retail
banking. Sipko Schat explains that this type of grass roots banking
not only supports local communities and economies, it also
allows Rabobank to better serve its large corporate clients. "For
example, it enables us to connect issues, such as sourcing and
reliability, and then use that knowledge of the local markets to
help our larger clients," he says. "The issue of sustainability has
been on our agenda for over ten years - we were one of the first
companies to develop this within the financial sector - but our
challenge now is to convert sustainability into viable product
structures and ideas right across the organisation, which add
value to communities and benefit us and the economy in general.
It's a goal l'm confident well achieve."
ISSUE 23 MAY 2010 R] WORLD 13
