Less than four years after a
high-profile launch, Rabobank is to drop its
environmentally-friendly credit card designed to compensate the CO2
emissions related to its cardholders’ purchases. In its place, the
Dutch co-operative has kicked off an ambitious group-wide project
to reduce CO2 emissions. Douglas Blakey reports.
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Few banks around the
world have pushed social or ethical banking with quite the degree
of enthusiasm as Dutch co-operative Rabobank. Long before it became
fashionable for banks to jump on the responsible banking bandwagon,
sustainability was in the words of its former chairman Bert
Heemskerk, “core to our operations”.
But in a rare reverse, on 1 January 2010 Rabo
will start to phase out its climate compensation credit card,
launched less than four years ago in partnership with leading
charity WWF amid a wave of publicity and with ambitious aims to
help neutralise the purchase of energy-greedy goods and
services.
Since the card was rolled out, the bank has
been paying a sum proportionate to the type of purchase into
environmental projects with the level of contribution being
determined by the impact the purchase would make upon greenhouse
gas emissions. So buying petrol at a garage or paying for an
airline ticket would result in an accordingly higher contribution
than buying a meal in a restaurant.
“We found out that the behaviour of our
customers was not really changing,” Ruud Nijs, the bank’s director
of CSR told RBI. “We paid a lot of money and the impact was
disappointing. We wanted to change the behaviour of our customers
but research has revealed that the credit card did not contribute
to increased CO2 awareness among Rabobank customers. The costs for
purchasing the emission rights [Gold Standard credits] to support
clean energy projects in developing countries also turned out to be
much higher than anticipated.”
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By GlobalDataShifting focus
While a setback, Rabo has wasted no
time in launching a group-wide initiative that is designed to
contribute to achieving a CO2 reduction of 20 percent per full-time
employee.
In pursuing such a target, the bank is
shifting the focus from CO2 compensation to the actual reduction of
CO2 in view of the urgency of the climate problem.
“It is much better to reduce than to
compensate; it was worthwhile to try the card initiative and you
have to be prepared to take a risk,” explained Nijs. “Our new
project with WWF will, I think, do the trick and will involve the
bank spending the same amount of money.”
That scheme involves a partnership with WWF as
part of a broader national and international alliance to establish
a special investment fund that is aimed at sustainable energy and
clean technology.
In particular, the fund will invest in
promising Dutch technology start-ups that develop innovative
technologies or processes that make the chain from raw material to
end product more sustainable, with the focus on agriculture, food
production and hydro, wind and bio-energy.
The fund will invest a maximum of €2.5 million
($3.7 million) in a business in the form of a minority stake. The
total size of the fund at its inception will be €21 million with a
planned increase to up to €40 million in early 2010, sufficient to
develop a portfolio of between 15 and 25 promising businesses.
“This will really help our customers who
cannot get access to capital and is just one example of a lot of
good things which are happening,” said Nijs. “I have seen more
boardrooms than ever before in the past year and I believe there is
a change of attitude towards CSR.”
The high-profile international Copenhagen
summit on climate change can also boost the bank, if it has a
positive impact on businesses that are energy self-sufficient or
dealing with alternative energy like wind and solar.
Looking ahead on the retail side, he
argues there is scope for the bank to make its mainstream products
more sustainable.
“For example, our green mortgage product could
change into a mainstream product. While our continued aim is to be
the leading bank in terms of sustainability, the good thing is it
makes good business sense-you can make good money from it and I
maintain that the economic crisis has not pushed CSR down the
agenda,” he stressed.
Additional areas
Nijs is similarly upbeat about two
additional areas of his remit within the group: his chairmanship of
the small Green Bank subsidiary and the charitable organisation,
Rabobank Foundation which he heads.
“The green bank is separate from Rabo, with
assets of about €4 billion and is aimed at two audiences – private
individuals with assets over €50,000 and the SME sector, who want
to invest in environmentally-themed asset management.”
And the principle of a specialist niche bank
is, says Nijs, to be extended to a new start-up, a cultural bank
subsidiary, designed to provide funding for the arts.
At the Rabobank Foundation, established in
1973 with the aim of supporting the development of small rural
co-operatives through donations, loans, trade financing and
technical assistance, an average of around 150 projects are
supported each year – around 50 in the Netherlands with the
remainder centred on 25 developing countries in South America,
Africa, Asia-Pacific and Eastern Europe.
The foundation’s core focus on microfinancing
and sustainable chain development is, he argues, paying off in
transforming people’s lives; nor is it merely an act of
philanthropy with 90 percent of all loans repaid.
Indeed a lack of budget is not an issue.
“I do not have a problem with lack of
finance,” Nijs said. “My biggest stumbling block is to find the
right projects.”
