Sustainable phone and soap get financial boost

Through its Sustainable Impact Fund, ABN AMRO invests in “growing companies that make an impact” with a focus on three themes: the energy transition, the circular transition and the social transition. Companies in which the fund invests have completed the start-up phase and are in the process of building a solid client base. They also have major growth potential, but need capital to take the next step.

Positive impact

Sustainable investment can often boil down to simply minimising potential negative impact. But the Sustainable Impact Fund goes further, says Investment Manager Nadine Weber: “The companies we invest in have a proven track record when it comes to making a positive environmental and social impact. We also work with the Impact Institute to calculate both the negative and the positive impact a given business model may have.”

“Once those calculations confirm that a business is truly making a contribution to a more sustainable world and that its business model is healthy, the bank is interested,” adds Investment Manager Pauline de Valk. “If we decide to invest, we usually opt for a large minority stake (less than 50 percent) in the company. Investments range from EUR 2 million to EUR 30 million. Our ultimate aim with these investments is to accelerate the transition to sustainability and generate a financial return.”

The sustainable option

The Dutch company Fairphone has certainly proved it has that potential. Fairphone has taken a stand against the throwaway culture exacerbated by the mobile phone industry. Mobiles contain many precious metals and minerals obtained using unsustainable extraction processes. After only a few years’ use, the phones – and the valuable raw materials they contain – are often discarded. Fairphone markets high-quality mobile phones with recyclable parts, which means they last much longer than other models. They’re also designed for easy repair by users themselves.

“Fairphone is the only truly sustainable option in this sector,” says Pauline. “The company started out as a public awareness campaign. They were determined to show the industry that it’s possible to manufacture a sustainable mobile phone, and eventually took matters into their own hands. Now they’re developing these phones themselves. The fourth-generation Fairphone is out now.”

Fairphone is a founding member of the international Fair Cobalt Alliance, which is committed to ensuring better working conditions for miners of cobalt, a key metal used to make batteries. Along with big names like Google and Tesla, Fairphone is listed as a partner on the website.

In 2022 alone, the company sold some 125,000 phones. And although that’s a lot, there’s still plenty of room to grow, with 15 billion mobiles in circulation throughout the world. With the investment from the Sustainable Impact Fund, Fairphone aims to raise its public profile in order to secure future growth.

Natural ingredients

Also having completed the start-up phase is Soaply, a producer of sustainable soap products with which it aims to promote the use of sustainable soap, in addition to ensuring greater transparency in the sector. “When it comes to food products,” Nadine says, “you can rely on labels to tell you exactly what they contain. Unfortunately, that’s not the case with hand soaps or detergents. Soaply’s products are free of mineral oils derived from fossil fuels, and contain only sustainable, natural ingredients.”

Consumers shopping for products like soap are gradually coming to expect the same level of transparency and accountability they’re used to when buying food products. Founded ten years ago, Soaply foresaw this trend early on, and now employs an enthusiastic team of twenty-five people. The company markets five specific products. Nadine says, “Soaply plans to use the bank’s investment to develop new products and expand internationally.”

Conscious consumers

“Motivation at Soaply is extremely high,” she continues. “They’re convinced they can make a difference. And rightly so, since the number of conscious consumers is growing fast, as is the market they represent. These individuals go out of their way to choose sustainable brands and are willing to pay more for them.”

Pauline concludes, “These companies are proof that sustainability and financial profitability can go hand in hand. It’s great that we can help companies grow in this way, and thereby accelerate the transition to sustainability. That’s certainly what we anticipate, too – initiatives like Fairphone and Soaply can have a major knock-on effect.”