Reputation risks and credit risks
Triple P
CSR monitoring and reporting (GRI guidelines)
CSR in products and services
CSR in lending
Rabo Groen Bank
Sustainable Rabobank operations
63 Rabobank Group Annual Report 2005
Corporate social responsibility
Reputation management under CSR is performed by adequately, regu
larly and proactively addressing issues that concern Rabobank's actions,
such as respect for human rights in enterprises financed by us.
Reputation management is also implemented by means of transparent
corporate governance, by operating in compliance with external guide
lines and internal codes and by incorporating sustainability criteria in the
financial services. For example, CSR reviews are increasingly incorporated
in credit assessments.
It is of great importance to Rabobank Group that its customers and other
stakeholders perceive corporate social responsibility as a visible and
distinguishing element of the bank's image and actions. To institutional
investors, the CSR element is increasingly a determining factor in their
decisions to invest, with special focus on the ratings awarded to
Rabobank by the various agencies that issue 'sustainability ratings.
Rabobank's good 'triple P rating' (people, planet, profit), makes it more
interesting for institutional investors to invest in Rabobank bonds.
Thus, Triple P has a direct link with its financial counterpart, i.e. the
Triple A rating.
Within Rabobank, corporate social responsibility is made visible by
monitoring in all individual business units and in the local Rabobanks.
In this way, the envisaged transparency in non-financial performance is
realised. As a result, Rabobank Group's Annual Responsibility and
Sustainability Report 2004 was the first to receive partial positive verifi
cation in the Netherlands. Monitoring facilitates managing towards CSR
targets and result reporting. Starting 2006, all CSR data to be collected
must meet the same quality demands as those defined by the Dutch
Central Bank for financial data. Each quarter, the CSR data will be proces
sed by Rabobank Group's Financial Control simultaneously with the
financial data.
The year 2004 saw the first closing of the Robeco Sustainable Private
Equity Fund of Funds. This fund, of which Robeco is the Asset Manager
and Rabobank the Investment Advisor, closed at a volume of EUR 122
million. The fund is used for investments in the best 'clean-tech' and
'mean-stream' private equity funds. These funds invest in non-listed
enterprises that are stimulated in the area of corporate social responsibi
lity by applying Rabobank's 'Responsible Entrepreneurship Guidelines.
The aim is to improve the performance of these enterprises by means
of risk control and by using opportunities arising from social and
environmental developments. In 2005, the Fund of Funds received the
Clean Tech Award from Clean Tech Ventures for the most innovative
clean-tech investment product.
Rabobank's position in the food agri sector entails social responsibility.
The implementation of a sustainability review in the credit assessments
of projects in Brazil, Singapore and Thailand, as well as in the Netherlands,
was therefore continued in 2005. Based on research in Brazil, a new CSR
instrument will be applied in lending in that country in 2005. Under this
scheme, the client will receive both a credit rating and a CSR rating, with
an explicit review of his performance in the most relevant non-financial
areas. Social issues such as corporate governance, staff policy (including
human rights), product and customer safety and the environment can
be factors for each country and sector. Explicit focus on CSR in the
lending process makes it possible to manage risks resulting from social
or environmental developments.
Rabobank maintained its lead in the market for green financing in 2005
and has a market share of 50%. Total assets of Rabo Groen Bank amoun
ted to EUR 2.7 billion. Gross loans increased to EUR 550 million in 2005.
Last year saw the first 'earmarked' issue of green bonds. These are bonds
with advance indication to investors of the project the issue proceeds
will in principle be spent on. In 2005, EUR 53 million in funding was
realised with these bonds to finance the new waste-fired power plant of
Afval Energie Bedrijf, in Amsterdam.
Rabobank is particularly strong in financing Green Label Greenhouses,
biological agriculture, agricultural nature management and wind energy,
with the local Rabobanks playing an important part. Nearly all banks sell
green bonds to private clients. More than three-quarters of the local
Rabobanks are involved in providing green financing.
Obviously, an important element in the overall CSR policy is realising
sustainable operations within the Rabobank organisation itself. Numerous
initiatives in this area have been developed over the past years. Targets
include reduction in paper use, procurement of green power only,
sustainability in building offices and sustainable staff mobility.
Reduction in paper use
'A forest a year' - this is Rabobank Group's targeted reduction. The ultimate
target is a 10% reduction in A4 paper use, 7% of which was achieved in
2004. Despite this slowdown in 2005, the 10% reduction has now been
reached.
