ABN AMRO launches Sustainable Impact Fund

Combining sustainable impact and financial returns – that’s the aim of ABN AMRO’s new Sustainable Impact Fund. Including the word “impact” in the name was a conscious choice, says Mirna Geense, head of Corporate Investments, who oversees the fund.

Growth and impact

“In practice, investing in accordance with ESG (environmental, social and governance) guidelines often boils down to avoiding negative impact by steering clear of undesirable developments or sectors. Impact investing, on the other hand, puts you in the driver’s seat when it comes to making a positive contribution in the areas of climate, circularity and society, and lets you actually measure that impact, too.”

The Sustainable Impact Fund invests the bank’s capital in “growing companies that make an impact”. These may be small, disruptive businesses or larger, well-established organisations. But they’re all built on a sustainable business model and need capital to achieve further growth and impact.

Setting targets

With roughly EUR 100 million in investments from the existing Energy Transition Fund, the new fund is expected to grow in the coming years to approximately EUR 425 million. Investments range from EUR 500,000 to EUR 30 million.

“We’re currently in the process of setting measurable targets. Since we invest in a wide range of companies, those targets can vary,” Mirna explains. “A target might be anything from cutting carbon emissions or reducing waste streams to creating a specific number of jobs for people with disabilities. The most important thing is that it’s about sustainable change, which is in line with our objective as a bank: accelerating the transition to sustainability.”

Measuring impact

Companies in which ABN AMRO invests will be required to report on the impact they make. That impact may be quantified by the Amsterdam-based Impact Institute, which develops open-source standards for measuring, valuing and reporting on impact and in which the bank is currently also an investor.

The investments made by the fund are completely separate from ABN AMRO’s financing activities, however. “We finance our clients, but invest our own capital – these activities are strictly separate,” Mirna stresses. “As a fund, we make independent decisions. There’s no synergy or crossover with the bank’s financing products.”

A leading position

On average, ABN AMRO holds a stake in a given company for five to seven years. During that time, the bank may also put forward members to sit on the supervisory board or opt for representation by an external expert on its behalf, as is currently the case at the Danish company Fiberline Composites, a manufacturer of components for lighter, stronger wind turbine blades.

“Envision is another company the fund has recently invested in,” Mirna says. “They develop software that lets the visually impaired scan their surroundings using smart glasses or a smartphone. These images are then converted to audio or text, which can help them better navigate as full members of society.”

Investing in the circular economy

The fund is also looking to a new area of investment – circularity. Mirna explains: “We want to invest in circular companies as well, since this is very much in line with the bank’s focus. These are often fledgling companies that we can make relatively smaller investments in now.

“We’re hoping to become one of the bigger impact investors in north-west Europe over the next few years,” she continues. “We combine financial return and impact, and help grow young companies to maturity. We support mature companies with our network and expertise. All this lets us strengthen their business model and contribute proactively both to the energy transition and to a more social and circular economy.”