Bethmann Bank further expanding its sustainable investment

According to the jury of the German Brand Award, sustainability has been ‘a strategic pillar at Bethmann Bank for more than ten years’. Sustainability and ESG ‘are embodied on a daily basis from board level down, as is credibly evidenced by the bank’s way of thinking and acting generally and its commitment to a future worth living’, reads the jury statement.

“Bethmann Bank was an early adopter when it comes to sustainability,” says Steffen Kunkel, Head of Investment Strategy. “We sensed early on that there was growing interest among our institutional and semi-institutional clients to manage their portfolios sustainably. And because we had investors with sustainability experience, we made strides rather quickly.”

Growing share in sustainability

In discretionary portfolio management, two-thirds of Bethmann Bank’s portfolio is currently categorised as sustainable or ESG investments. The share of responsible investments has grown exponentially over the past few years. Of all new assets coming in, 75 percent is allocated to ESG or sustainable investing. Since 2011, the bank’s investment policies are monitored by an independent sustainability advisory board including renowned experts.

Hearts and minds

The year 2022, however, marked a critical year for ESG investments, as Hans Hanegraaf, CEO of Bethmann Bank, explains. “With commodities like oil performing very well at the beginning of 2022, the debate about the sense of investing sustainably became more controversial. This raised the question: has sustainability really won the hearts and minds of people?”

Early signs indicate it has. Steffen: “Sustainable investing is about values. Our clients know what we stand for and made a clear decision. Yes, if commodities are performing well, sustainable investments may underperform slightly. But investing has always been about the long term. Together with our clients, we look at the long-term growth opportunities and risks. Once clients see the bigger picture, they are reassured and take well-informed decisions. These conversations with clients actually go really smoothly.”

Impact investing

Bethmann Bank is aiming for 80% ESG investments in its portfolio by the end of 2023. It also intends to strengthen and expand its efforts in impact investing. In this investment category, the focus is on products or services that generate measurable environmental and/or social impact.

With efforts like this on the sustainable and impact investment front, however, the bank itself cannot lag behind. Bethmann Bank has defined 17 objectives for its own sustainability, ranging from an all-electric car fleet and net-zero office buildings to responsible governance. Bank employees get paid time off for Social Days, so they can get involved in charitable projects.

“We want to lead by example”, Hans says. “That is why we’ve created a bank-wide Sustainability Execution Board. This board coordinates our sustainability activities and reports regularly to the Executive Board.”

Always improving

New EU legislation is currently being developed in order to combat greenwashing of financial products. While created to boost sustainable investing, the laws also bring new challenges to the financial industry with regard to transparency and investment management standards.

Nevertheless, Steffen is confident that sustainability will stay at the forefront of Bethmann Bank’s and ABN AMRO’s strategy going forward. “In some ways, the EU Taxonomy may act as an equalizer. It provides a uniform framework determining which business activities are considered sustainable and which are not. At Bethmann Bank, we’ll keep improving our data management and research capacity, our detailed company analyses and our engagement with the companies we invest in. In doing so, we will always distinguish ourselves from the competition. With or without EU laws: you cannot fake expertise. Only through expertise can you strengthen internal governance – an important driver of credibility. In the end, people quickly sense what’s real and what’s not.”