ABN AMRO publishes impact on biodiversity

Things aren’t going well for biodiversity. At the same time, society is hugely dependent on the diversity of plants, animals and microorganisms, and the interactions between them. Obvious examples are access to clean water and crop pollination. The bank’s operations, its clients and suppliers all have an impact on biodiversity.

Tracking the loss of biodiversity

André Jakobs, a senior sustainability adviser at the bank, says it’s no real surprise that ABN AMRO’s impact is negative: “Almost every company out there impacts negatively on biodiversity. But in most cases, that never gets beyond a hunch or a qualitative estimate. The bank’s publication is different in that we’ve calculated the impact we have on biodiversity expressed as an actual figure.”

In 2021, that amount totalled EUR 95 million. That’s the extent of ABN AMRO’s negative impact on global biodiversity. Shrugging his shoulders matter-of-factly, André says, “Obviously, that number doesn’t say a lot in itself. Far more important is the fact that we can now see where that negative impact lies, which means we can also take quantifiable steps to reduce it.”

Wake-up call

Today, alongside their financial reporting obligations, financial institutions must also report in ever-greater detail on sustainability themes. Although reporting on biodiversity is not yet mandatory, it is high up on the European Commission’s agenda. André continues, “We won’t be publishing a detailed report in this form every year, but reporting on biodiversity will be mandatory at some point in the future. And rightly so, since the loss of biodiversity has received very little attention for far too long, despite having dramatic implications for our world. That’s why I see the report as a wake-up call both for the bank and for our stakeholders. Biodiversity is set to be the next big thing.”

Measuring impact

Since measuring impact on biodiversity is still relatively new, it’s hard to compare data. The methodology used by the bank is the same as that used in its Impact Report, which ABN AMRO has published alongside its annual report since 2018 in collaboration with the Impact Institute. It uses calculations and models to express in euros the total impact ABN AMRO has on its stakeholders. The publication on biodiversity applies this methodology to four drivers of biodiversity loss: the climate crisis, land use, air pollution and water pollution.

The report identifies where in the value chain negative impact takes place. In theory, that could be anywhere, including the bank’s own operations, or those of its clients or suppliers, and often even further down the chain to clients’ clients or firms ABN AMRO’s suppliers work with.

Making better choices

So what does the bank plan to do with this information? Should it become “biodiversity-neutral”? “It’s still early days,” André emphasises. “If you want to include this type of information in your daily decision-making, you need additional data from your clients and suppliers. To be honest, we’ve got quite a lot to do before we get to that point. But the bank is free to start making better choices even before sector-wide agreements on methodology are in place. And by that, I don’t mean taking drastic steps like exiting entire sectors, which would neither fit with the bank’s strategy nor solve the problem. But we most certainly can initiate a dialogue with those of our clients and suppliers who are underperforming in this area.”

The report also cites a number of ways in which ABN AMRO has now committed itself to preserving biodiversity. For instance, the bank is working with its suppliers to establish more sustainable procurement procedures, and ABN AMRO Groenbank is financing the transition to organic farming.

Long haul

Despite all this, André says he expects it will be a long haul. As a student, he conducted research in 1994 for the second IPCC climate report, which failed to generate much interest at the time. He says, “I’ve been working at the interface between sustainability, innovation and business for the last thirty years. Unfortunately, critical change like this often takes a lot of time. But I do believe this publication is a step in the right direction for ABN AMRO. The analysis will help the bank understand what its impact is and where it’s happening. The next steps we have to take will be difficult ones, but we will need to take them. After all, that’s our strategy – helping our clients become more sustainable.”