New Code of Conduct makes ABN AMRO’s procurement policy more sustainable

From coffee beans to laptops, IT services to professional cleaning – ABN AMRO sources a wide variety of products and services from suppliers in and outside the Netherlands. Sustainability is becoming an increasingly important factor in procurement. The newly revised Supplier Code of Conduct provides more detailed guidance on the bank’s priorities, say ABN AMRO’s Nelleke Hoffs, Procurement Sustainability Lead, and Chyralene San-A-Jong, Procurement Management Consultant: “Our aim is to encourage suppliers to become more sustainable.”

The Code reflects ABN AMRO’s desire to enhance the social and environmental impact of its procurement practices. Where did you identify opportunities for improvement?

Nelleke: “We updated our Code of Conduct to clarify what ABN AMRO expects from its suppliers. The older version of the Code outlined our expectations, but not always in concrete terms. I mean, no one’s going to disagree with a statement like ‘we value human rights’. The updated Code sets out what we find acceptable and what we expect from our suppliers.”

Chyralene: “The new Code underscores our strengthened commitment to sustainability and better reflects our broader social objectives.”

So the Code now offers more detailed information?

Chyralene: “Yes, plus we’ve added a number of sub-themes such as social responsibility, ecological sustainability, and diversity and inclusion.”

Nelleke: “Under diversity and inclusion, we’ve expanded the definition beyond gender and sexual orientation to include individuals with disabilities. We emphasise the importance of ensuring websites and platforms are accessible to people with visual, hearing and cognitive impairments. That way, visually and hearing-impaired staff can work more effectively with company software.”

The updated Code of Conduct also incorporates provisions to address forthcoming sustainability regulations. How do suppliers see this reflected?

Nelleke: “The Code already aligns closely with the Corporate Sustainability Due Diligence Directive (CSDDD) requiring banks to identify and address negative social impacts in their supply chains as these relate to human rights or the environment. We’re taking a proactive approach by embedding these principles into our supplier relationships. And we’ve added clauses that allow us to better monitor our suppliers’ sustainability performance.”

And how does the bank monitor its suppliers’ sustainability performance?

Nelleke: “By specifying the type of information we require from suppliers, the Code now lets us monitor their compliance with our sustainability requirements. One aspect we’re addressing is working conditions in our supply chain and, specifically, preventing things like structural overtime. Sometimes there are indications that employees of certain providers are regularly required to work weekends. The Code authorises us to ask providers to disclose that information and require them to comply with that request. Most importantly, though, it also creates a basis for dialogue.”

Chyralene: “The whole point is to get suppliers to start thinking about working conditions. By adhering to the standards agreed to in the Code, they can make the necessary changes, such as eliminating mandatory weekend work. This is how we can drive change.”

Nelleke: “It’s about striking a balance between our goals and current realities. For example, we want our suppliers to avoid using conflict minerals [raw materials like tin and gold mined in conflict zones to fund war], but many companies aren’t yet in a position to trace the origin of all their materials. As soon as we deem it feasible, we’ll include this in the Code. In the meantime, we’re engaging with specific suppliers to discuss our aims with them.”

What happens if a supplier can’t yet meet the Code’s sustainability requirements? Does the bank end the relationship?

Chyralene: “We get this question a lot. The answer really depends on the nature and value of the products or services provided and the sustainability risks or opportunities involved.”

Nelleke: “Monitoring is a tool we can use to establish a dialogue with a given provider. Rather than excluding suppliers, we aim to engage with them, supporting them as they work towards the changes we hope to see.”

Is that why ABN AMRO makes a point of asking suppliers for feedback in the Code?

Nelleke: “Absolutely. Although we have extensive expertise in sustainability, such as conducting business with respect for human rights, we’re constantly learning and trying to improve, just like our suppliers. That’s why we share our knowledge and value the insights they bring.”

Chyralene: “Change starts with engagement. By working together, we can take the next step towards achieving our shared sustainability ambitions. Ultimately, the partnership will help us make a joint positive impact on society and the environment.”