Raising the bar again: ABN AMRO takes next step in climate strategy

ABN AMRO continues to make progress towards the goals set out in its climate strategy. In 2019, the bank joined 49 other financial institutions in endorsing the Dutch Climate Agreement. It also supports the transition to a net-zero economy by 2050, which means minimising greenhouse gas emissions and removing remaining emissions from the atmosphere.

Road map

“The Net-Zero Banking Alliance (NZBA), which ABN AMRO signed up to in 2022, serves as an important road map for the bank’s own climate strategy,” explains Anne Huibrechtse, Head of Climate & Innovation at ABN AMRO. The alliance is made up of more than 140 banks that forge agreements on their climate efforts. For ABN AMRO and these other banks, sustainability is not just about loans granted to companies and businesses, but also about mortgages and their own operations. “We’re aligning our loan portfolio with our climate goals by helping our clients to become more sustainable,” says Michael Buijsman, Climate Strategy Programme Manager at ABN AMRO, “by using our knowledge of low-carbon technologies to reduce emissions and by granting sustainability loans on favourable terms.”

Challenging targets

Setting sector-wide reduction targets that are both realistic and challenging requires great precision and is based on the expertise of ABN AMRO’s sector bankers and on contact with clients. Anne says, “We are already seeing significant reductions in carbon emissions from our clients in a number of sectors.” Indeed, the results published in the annual report show that the oil and gas and residential sectors are on track to meet interim targets.

Achieving these targets is a joint effort, with ABN AMRO supporting its clients as they make the transition. For example, the bank is encouraging its business clients to switch to electric vehicles and sharing its knowledge to ease the transition, in addition to offering financing packages for zero and low-emission vehicles and advising clients on potential subsidies for zero-emission vehicles. “We see it as our role to identify areas for improvement,” says Anne. One of the bank’s latest targets involves a 25 per cent reduction in the emission intensity of trucks by 2030. For vans, the target is a 37 per cent reduction relative to 2023 levels, ensuring that the sector is on track to meet the interim targets by 2030. At the same time, Dutch and EU regulations will play an important role. “A robust charging infrastructure for electric vehicles in Europe is one aspect to consider here,” Anne explains. “Without this infrastructure, it will be more difficult for companies and businesses to make the switch.”

Changing circumstances

Sustainability is about more than reducing carbon emissions, Anne continues: “Our climate strategy emphasises the need for a just transition” – in other words, the bank takes into account a range of social and other interests, constantly weighing them against changing circumstances. “In the oil & gas sector, for instance, the availability of energy is an important factor to consider, as households need to be able to count on a reliable, constant supply of energy.” Geopolitical developments like the war in Ukraine underline the importance of this.

An ambitious new target

In addition to reducing emissions, the bank is looking at how lending can contribute to the uptake of renewable energy. The impact is already exceeding expectations. Anne explains, “Back in 2022, we set a target to increase our lending commitment to renewables and other decarbonisation technologies to at least EUR 4 billion by 2025. We exceeded this target at the end of 2023.” It’s an achievement that reflects the bank’s ambition to accelerate the climate transition, says Michael: “ABN AMRO has so much in-house expertise involving electrification and hydrogen – it’s one of our main strengths.” All the more reason to set a new, even more ambitious target. The bank now aims to have financed at least EUR 10 billion in renewable energy by 2030.

Own operations

Another key component of the bank’s climate strategy is to make its own operations more sustainable. The bank aims to be carbon-neutral by 2030. Michael says, “This includes emissions from our office buildings, IT operations and travel. We also share the knowledge we gain with our clients. As a bank, we want to be a good example to others.”

No time to relax

Just because the bank has met its interim targets doesn’t mean it’s time to sit back and relax, Anne and Michael underline. After all, the goal is to accelerate the energy transition. And, as Anne points out, this success puts the bank in a good position as legislation, technologies and methodologies evolve: “As soon as climate scientists publish new figures, we’ll revisit our targets and ask what we need to do to meet them. And the sooner those targets are met, the better – not just for the bank and its clients, but for society as a whole.”