How we helped ABN AMRO measure its impacts
We supported ABN AMRO in their first attempt to measure the impact of their mortgage services, their investments in the cocoa chain and the bank as a whole. The results show the main contributions of ABN AMRO to society: financial and social capital creation.
Occasion of the study
ABN AMRO works to be a better bank contributing to a better world. It is firmly grounded in society and aims to create value for its shareholders as well as its clients and society at large. For any bank it is challenging to understand and manage its many and complex impacts on society. For this reason, ABN AMRO took the first steps in 2015 to measure the impact of their mortgage services, their investments in the cocoa chain and the bank as a whole. These steps were in line with their reporting approach based on the International Integrated Reporting Council (IIRC).
Description and key results
True Price supported ABN AMRO in their first attempt to measure these impacts. The three projects produced a first indication of key value drivers, risks, opportunities and actions that could improve their impact on society. The first project shows that ABN AMRO’s mortgage provision contributes significantly to financial, manufactured and social capital creation. The main negative impacts are on financial capital (mainly by contributing to subsidies) and on natural capital. One of the ways in which ABN AMRO addresses the natural capital cost is through Green Bond focusing on sustainable housing.
The second project, the cocoa trade finance services, also zoomed in into the largest negative impacts at farm level: human capital. Income (underpayment of workers and under earning of farmers) and child labour are the largest human capital costs.
Results of the third project focusing on the bank as a whole, show that ABN AMRO’s main contributions to society are financial and social capital creation. Financial capital creation consists mainly of own profits, salaries and taxes as well as enabling clients to make profits and accumulate wealth. Social capital creation is mainly due to services to consumers: providing a stable payment and savings system and the advantages of home-ownership. Other large positive impacts are on manufactured capital (accumulation of assets) and human capital (own workforce and that of clients). The main negative impacts are on natural and financial capital (the latter mainly due to impact on the (tax) subsidies).
Advantages and next steps
The pilot projects produced a first indication of key value drivers, risks, opportunities and action that could improve ABN AMRO’s impact on society. This provided ABN AMRO with the first insights on measuring their impact. All in all, this results in a better understanding of ABN AMRO’s impacts and capabilities to manage them for the company (ABN AMRO, 2015).
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