Rabobank Group

Corporate Social Responsibility in Rabobank

April 22 2008

Green Globe Banking Conference

Roberto de Cardona

Rabobank Group2

CSR: people, planet, economy

� Corporate Social Responsibility:

– In addition to profit also take social and environmental aspects

into account

– CSR � PPP: People, Planet, Profit � ‘Holistic Approach’

Clients/Sup

pliers

Clients/Sup

pliers

Clients/Sup

pliers

Clients/Sup

pliers Members

Members

Members

Members

Society

Society

Society

Society

InvestorsInvestorsInvestorsInvestors

Employees

Employees

Employees

Employees

Profit

PlanetPeople

InnovationRisk Mgmt

Cost reduction

Rabobank Group3

Most Relevant International Guidelines

� Equator Principles

� OECD guidelines for multinational companies

� UN Global Compact

� UN Human Rights Norms for Businesses: norms 1-14

� ILO Conventions

� RSPO principles and criteria

Rabobank Group4

Why a CSR assessment?

Ethics

� Our code of conduct says:– We care for nature, living environment and animal welfare– We respect human rights and local culture– We take into account direct and indirect effects of our

activities– We want to contribute to sustainable development

(economical, social, environmental)

Reputation

� Comes in when we support a client who did not solve an

issue that conflicts with our codes or ethics

Rabobank Group5

Key issue approach

� We assess key CSR issues in a sector

– Passive attention for rest of possible CSR issues

– If no group policy exists on an issue, we use common sense

� Unwanted practices:

– Describe activities that we do not want to support

– Violation without means ending a relationship (non compliant)

� Good practices:

– Describe good practices

– Positive role of Rabobank

– Client can be compliant, compliant in the near future or non

compliant

– Lack of interest to improve may on the long term result in ending

relationship (will not happen often in a good relationship)

Rabobank Group6

Normative framework Rabobank

� 10 CSR guidelines based on code of conduct, mission

statement and external CSR guidelines

� Exclusion list for sensitive activities

� Specific CSR guidelines or policies (some in preparation)

� Advice Ethics Committee

� Integrity guidelines (this is the domain of the Compliance

Officer)

Rabobank Group7

10 CSR-Guidelines

1. Corruption / bribery

2. Poor labour conditions

3. Exploitation of workers

4. Harmful child labour

5. Discrimination

6. Pollution

7. Irresponsible depletion of scarce natural resources

8. Cruelty to animals

9. Poor treatment of indigenous peoples

10. Health and safety risks for consumers

Rabobank Group8

Local Management Defines Local Actions

� Global norms and guidelines need to be translated into local

actions and criteria, e.g. in case of “corruption/bribery”:

– How can Rabobank detect whether a client is involved in

corruption?

– What type/level of corruption/bribery can be accepted

� Translation is done together with local senior management in

order to get practical and acceptable approaches

Rabobank Group9

Rabobank

� 15th largest bank in the world

� Leading Food & Agri bank

worldwide

� Co-operative (no

shareholders, not stock listed)

� Over 56.000 employees

� AAA rated commercial bank

� Best European bank in SAM /

DJSI rating (Triple P), second

worldwide after Westpac, Au.

Rabobank Group10

List of CSR issues per sector

� Automotive industry

� Beverages sector (Europe)

� Chemical industry

� Cocoa sector (Europe)

� Construction industry

� Dairy sector (Europe)

� Farm inputs sector (Europe)

� Food retail and consumer sector (Europe)

� Fruits, vegetables and flowers (Europe)

� Grains and oilseeds sector (Europe)

� Leisure industry

� Metal products and machine building industry

� Metal sector (Europe)

� Palm oil sector

� Public sector

� Real estate industry

� Seafood sector (Europe)

� Shipbuilding industry

� Staffing industry

� Sugar sector (Europe)

� Soy sector

� Timber sector

� Waste management

� Wholesale and retail industries

Rabobank Group11

Rabobank CSR group organization

• Green Management

• Rabo Green Bank

• Rabo Innovation

Capital Fund

• Rabo Sustainability

Fund

GreenBanking

SustainableDevelopment

FundsEthics and Issue Management

CorporateSocial Responsibility

Division

Staff

• (Strategic) SustainableDevelopments

• Internal EnvironmentalCare

• Sustainable AssetManagement

• Secretariat• Communications• Control• Donation FundCSR

• Rabobank Foundation (national)

• Project Fund formember issues

• Herman Wijffels Fund

RabobankFoundation

(international)

SocietalFunds

Rabobank Group12

CSR-check in Client Acceptance

Rabobank GroupPolicies

NGOs

Clients

Permanent dialogue

Tailored CSR Credit Guidelines

CreditDecision

External Norms /Guidelines

NormativeFramework

Rabobank Group13

CSR check process

CSR qualification:

� Acceptable� Acceptable under conditions� Not acceptable

Explanation on behaviour regarding CSR issues

� Direct information

� Public information

� Signals

� One obligor principle

Types of issues:

� Sector specific� Country specific� Client specific

consideration

Credit applicationidentification CSR issues

CSR guidelines Rabobank Group Based on the code of conduct and external guidelines

� 10 guidelines for main issues� CSR issue lists� CSR policy documents

Rabobank Group14

Investigate only when meaningful

� Standard case: high level review

– Underlying assumption: client operates in accordance with CSR

normative framework

– i.e.: assume that client is “innocent” unless the bank has other

information

� In-depth investigation needed if:

– There are signals of non-compliance

– The client is active in predefined ‘high risk sectors’

Rabobank Group15

Non-compliance ⇒ Proactive advice

� Acceptable clients:

– Client meets all CSR requirements, OR:

– Client’s activities are not “up to standard”, but client shows

commitment to improving the situation within a reasonable

period of time

� Second category most interesting since Rabobank can

initiate/accelerate improvement by engaging with the client

� But: competition often constrains scope of ‘proactive advice’

Rabobank Group16

Rabobank Group key figures¹2004 - 2007

1 In some cases, these figures relate to a number of group entities only. Moreover, owing to changes in definitions, the data may differ from those published in previous years. For a proper understanding of

developments and results, reference is made to the 2007 Annual Sustainability Report, that will be published on the internet. This report will be verified.

2 Based on an employee satisfaction survey at Rabobank Netherlands, Schretlen, Alex, local Rabobanks and Orbay.

Rabobank Group17

Rabobank Group key figures¹2004 - 2007

Rabobank Group18

Investors take CSR into account

SiRi Company Rating Summary (Rabobank Group, January 2006)

Rabobank Group19

CSR: objectives for 2006 and beyond

� Policy:– Executive Board: include at least one CSR target in the

performance appraisal of the 200 executives (excluding the

executive members employed at local Rabobank) in 2007; more

attention to CSR subsidiaries

– Local Rabobanks: include CSR in their banking policy

– De Lage Landen: start an awareness program and set up a code

of conduct

– Audit Rabobank Group: audit the accounting system and internal

controls for CSR monitoring 2006 within the scope of the audit on

the Annual Sustainability Report 2007

– Control Rabobank Group: integrate CSR monitoring in the

standard planning & control cycle on a quarterly basis and CSR

report in management information to Executive Board

– Legal & Tax Affairs: internal reporting about the extent to which

integral regulations are geared to governance codes

Rabobank Group20

CSR: 2006 accomplishments and 2007 and beyond objectives� Rabobank:

– Energy supply at 97% from certificated green windmills in the

Netherlands (86% worldwide)

– Climate mortgage

– Credit Card with climate contribution with WWF

– Issue of EUR 800 mln green bonds

– Implementation of credit monitoring (in process)

– Issue list of 30 industry sectors

� Robeco:– Clean Tech Fund

– Sustainable asset management (SAM) acquisition

� De Lage Landen:– Formulate and implement a CSR acceptance policy for vendors