About this
Report
Chairman's
Foreword
Corporate
Management Report Appendices Governance
Consolidated Financial Company Financial
Statements Statements
Dilemma: Palm Oil
In 2018 we felt pressure from NGOs on topics such as palm
oil, animal welfare, and biodiversity loss. Our clients likely felt
it too. We recognize the importance of these issues and have
clear sustainability policies to ensure a transparent and
consistent approach in our global activities. We are also
proactively developing solutions and improvements through
our partnerships with other stakeholders such as UN
Environment and the World Wildlife Fund (WWF). Moreover,
we participate in the innovative multi stakeholder initiative
for a deltaplan aimed at restoring biodiversity in The
Netherlands.
Attention for Climate Change
Climate change is rapidly becoming one ofthe most important
global issues to impact society. It is also an important credit risk,
the assessment of which is to be incorporated in risk modelling
and risk management. Within our portfolio we will dedicate
special attention to the Real Estate sector in the Netherlands and
F&A globally because ofthe relatively large size of these asset
categories on our balance sheet. We recognize the urgency of
transitioning to a circular economy in these and other sectors.
We support them through activities like our Circular Economy
Challenge program to help entrepreneurs transition to circular
entrepreneurs. Last year, in cooperation with other Dutch banks,
we also introduced a set of circular economy financing guidelines.
Contribution to Climate Goals
Real estate is responsible for about 40% of global energy
consumption. Reducing the energy usage ofthe properties in our
real estate loan portfolio will make a valuable contribution to the
current Dutch climate goals. The Dutch government has set
ambitious targets for the energy efficiency of homes and office
buildings. In 2018, Rabobank worked with the government and
other stakeholders on the "Sector Table for the Built
Environment" and the "SectorTable for Agriculture and Land Use"
ofthe Dutch National Climate Agreement (which was presented
in July and will tender a more detailed draft final agreement in
December). Rabobank assisted in the conception of a workable
road-map to achieving these goals.
To make Rabobanks' real estate loan portfolio more sustainable,
we offer the Green Mortgage. We also introduced the Green
Construction Depot to incentivize retail clients to invest in
energy-saving measures for their homes. In April, we launched a
partnership with an energy broker to help our clients transition
to local sustainable energy suppliers. We have seen the energy
label ratings of our mortgage portfolio improve, as shown in the
table below.
Energy Labels in the Mortgage Portfolio
of houses of houses
funded funded
Energy label
by Rabobank by Rabobank
(2018)' (2017f
A 20% 18%
B 15% 15%
C 25% 26%
D 15% 16%
E 10% 10%
F 7% 8%
G 7% 7%
Total 100% 100%
1 In 2018 approximately 17% ofthe mortgage portfolio has a confirmed
energy label.
2 In 2017 approximately 16% ofthe mortgage portfolio has a confirmed
energy label.
Our real estate loan portfolio has also been analyzed by a
specialized agency to ascertain the energy labels. The conclusion
was that 55% of commercial real estate buildings have a "C"
energy label or higher, the minimum requirement by 2023
according to Dutch legislation, or 30%, including rental property.
We are working with our clients to ensure they can meet the 2023
requirements in time. All Rabobank offices in the Netherlands
will have a "C" label by 2020 (including an "A" label for all central
offices) and we aim for an "A" label by 2027. As of 2019, all our
offices in the Netherlands purchase green gas from Suiker Unie
and Wabico.
Launch AGRI3 Fund
Rabobank is chair of the World Business Council for Sustainable
Development (WBCSD) Climate Smart Agriculture Finance
working group. At the 2018 Annual WBCSD meeting in
Singapore, we announced the first warehoused investment ofthe
AGRI3 Fund, a joint initiative of the Rabobank-UN Environment
partnership for Forest Protection and Sustainable Development
with support from FMO and IDH. The AGRI3 Fund aims to
ultimately unlock USD 1 billion in capital for the transition toward
sustainable agriculture. Projects and transactions using blended
finance solutions will be mostly sourced from Rabobank's Rural
and Wholesale customer base, allowing us to strategically engage
with our clients while having a positive environmental and social
impact.
Enhancing Sustainability Performance
Rabobank uses its proprietary sustainability scan, the Client
Photo, to gain insight into our customers' sustainability
approaches and achievements. The Client Photo scan is
integrated into our standard lending process. In 2018,87% of our
Wholesale clients completed the annual Client Photo scan, an
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