corporate social responsibility at Dutch co-operative Rabobank,
winner of RBI’s 2008 Award for Best Integration of CSR into Retail
Banking, tells Douglas Blakey about his group’s
successful push into socially responsible consumer banking. He
argues it is a good way to make profits.
Putting an ethical or social spin on retail banking products was
one of the key market trends of 2007, with the largest players such
as HSBC and Bank of America some of the keenest to embrace this
ongoing market shift towards responsible banking. Few banks can
claim to have pushed social or ethical banking with the degree of
enthusiasm and success as the Netherlands’ Rabobank, however.
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“Sustainability is core to our operations,” said Bert Heemskerk,
Rabobank’s chairman, in the bank’s 2007 annual report – a lofty
claim but one recognised by the judges of Retail Banker
International’s Award for Best Integration of Corporate Social
Responsibility (CSR) into Retail Banking (see A night of
excellence, and also RBI 589).
While Rabo’s pitch into CSR is group-wide – its asset management
arm, for instance, acquired a majority interest in the Swiss
organisation Sustainable Asset Management, the leading institute in
the field of sustainable asset management in Europe – 2007 marked a
shift in the emphasis of Rabo’s CSR policies from value retention
through risk management to value creation through product
development.
In particular, Rabo became the first major European bank to launch
an ethical range of banking products linked to the environment. The
most high profile was the Rabocard, which debuted in April 2007, a
credit card made available to the bank’s 1.1 million customers and
designed in partnership with the environmental charity WWF. The
bank also released a green mortgage and established a Clean Tech
Research Desk, which it says it will develop into a leading
databank in the field of clean technology and benefit both Rabobank
and its customers.
“It is the proper thing to do,” said the bank’s associate director
of CSR, Daan Dijk, in an interview with RBI. “Business has
to become more ethical to be sustainable and for us it is not a
matter of greenwashing. Looking at what is at stake, ethical
banking is a wise thing to do if you want to make a profit.”
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By GlobalDataAt the heart of Rabo’s philosophy is a belief that initiatives that
contribute to improving the climate can also be commercially
successful. “Looking at retail banking, banks need funding and we
are finding that our clients prefer to earn a return from products
that are a part of the environmental solution… We need to
incorporate sustainability in all the processes of the bank,
including our retail products. Our customers do not expect us to
become philanthropists and still expect us to offer competitive
products.”
The Rabocard works on the basis of offsetting, with the bank
investing directly in Gold Standard climate projects to cover all
CO2 emissions that are linked to credit card purchases. The amount
to be invested has been established using a calculation method
developed by Rabobank and WWF based on CO2 data from the
Netherlands Environmental Assessment Agency.
“Rabocard has gone very well and we are very happy with it. We have
a good story to tell with Rabocard just as we have with the green
mortgage. We give a 10-year loan with a 1 percent discount for
existing homes up to €50,000 ($77,500) and a 1 percent discount for
new homes up to €100,000. That means quite a saving over the period
of the loan for our customers.”
He added: “We want to offer products that are intrinsically
sustainable and we do not, like some banks, only think about the
environment during certain months of the year, such as green sales
promotions.”
In terms of the bank’s marketing strategy, Dijk concedes that the
wider public may not be aware that the bank does not provide
project finance funding for any projects other than
environmentally-friendly energy. The bank did however promote the
launch of Rabocard with an integrated marketing campaign.
“We do some marketing when we start with a new retail product.
Rabocard, for example, is unique in The Netherlands and it is the
same for our climate mortgage.”
Something that makes a difference
The bank’s ethical policy even extends to staff
bonuses. “In every business unit of the bank, receipt of a bonus
depends on offering products that make a difference in terms of
sustainability. In the merger and acquisition division or in
wholesale or project finance, you must come up with something that
makes a difference… so there are financial and sustainability tests
to meet to obtain a bonus. We do not think there is gap between the
two.”
The environment is also at the heart of Rabo’s policy towards
company cars. In the Netherlands, cars are graded in groups A-H
depending on their CO2 emissions, with Rabo staff able only to
choose cars in groups A, B or C. “At first, some people in the bank
thought we were taking away their freedom of choice but now the
policy is understood and you are still able to choose some good
cars,” said Dijk, who chose one of the greenest vehicles on offer,
the Toyota Prius. “The policy extends to all staff, including
directors.”
